Tenant’s insurance is essential and often mandatory for anyone renting a home in Canada. It provides protection for liability coverage in case someone gets injured at your rental property, if any personal property gets damaged, and for additional living expenses in case your place becomes inhabitable.
Here we’ll answer some of the most common questions renters have about tenant’s insurance to help you understand how this insurance policy works and why you might need it. Let’s get started!
Is Renters Insurance Mandatory?
Unlike vehicle insurance, tenant’s insurance isn’t mandatory by law in Canada. However, landlords and brokers often require new tenants to purchase renters insurance before signing a lease and moving into their rental property.
What’s the Purpose of Tenants Insurance?
The purpose of purchasing a tenant’s insurance policy is to gain protection for your personal belongings in case of damage or theft. It can also help you cover the expenses of losses and injuries someone else incurs while visiting your rental. Or, if the space gets damaged, and you need to move somewhere else, the tenant’s insurance may cover the additional expenses.
How Much Does Tenant Insurance Cost?
The cost of tenant coverage can vary depending on your risks and policy. However, it’s still relatively inexpensive, especially compared to the amount it can save you if you or anyone else on your property suffers damages to their property or gets injured.
Most people will pay in the region of $15 to $40 per month, with the average yearly amount sitting around the $350 region. If you want a more exact figure then the only way to know for sure is to get a quote.
How Does Tenants Insurance Work?
Unlike your landlord’s home insurance, which only protects the building, tenant insurance provides coverage for your belongings inside the property, including your furniture, appliances, clothes, and other valuables.
For example, if a fire (caused by someone or something other than you) breaks out, and you’re forced to move out and your belongings are damaged, your tenant’s insurance will pay for your replacement/repair damages, along with the costs of living while you’re waiting for your rental property to get repaired.
Who Needs Renters Insurance?
Anyone renting a place to live can benefit from renters insurance. It’s a great investment as it can give you peace of mind if something happens to you or someone else’s belongings or someone gets injured on your property.
It reduces expenses by helping you replace losses, repair damages, and provide protection if someone gets injured in your home and subsequently takes legal action against you. It’s relatively inexpensive, so getting it makes a lot of sense.
What Happens If I Don’t Have Tenants Insurance?
The consequences of not having tenants’ insurance coverage can vary depending on the circumstances. However, in most cases, you’ll have to pay out of pocket for all your damages, losses, or liability costs.
If your rental gets damaged, and you don’t have money for additional accommodation, you’ll be left without a place to live. Even if you have savings, paying out of pocket can deplete them, and it can take a lot of time until you’ll be able to get back on your feet.
What Does Tenants Insurance Cover?
What does tenant’s insurance cover? It’s an important question that we’ve covered in detail before, but here’s a quick overview:
Property damage – If your personal belongings are damaged by someone or something else’s fault, your policy can help you repair or replace them.
Theft – Your belongings inside the property your rent, and sometimes even items stolen while you’re moving, travelling, or storing elsewhere can be protected against theft.
Emergency living expenses – Your policy could help you pay for alternative lodging and added expenses whether you are forced to move temporarily or permanently.
Legal liability – Helps pay the legal and medical costs of a person who gets injured while visiting you.
Vehicle break-ins – Even the belongings you store inside your vehicle can be protected against theft and damages.
Identity theft and credit card fraud – If your identity is stolen, some tenant’s insurance policies might help you cover the expenses you incur until you manage to get your identity back. The same applies to unauthorized credit card fraud, the policy can cover the expenses you incur if someone uses your credit and debit card without your authorization.
Death compensation expenses – Depending on your policy, your loved ones might receive compensation in case an accident that happens inside your home results in your death.
Some of those benefits listed above are dependent on what type of insurance you have and therefore it’s importance to choose the right tenants insurance policy for you.
What Isn’t Covered by Tenants Insurance?
Tenant insurance typically does not cover the following (although some insurers allow you to purchase additional coverage for some losses or damages):
A roommate’s belongings – By default, only the policyholder’s damages are covered. While you can add additional insured (including your roommate) to your policy, this isn’t recommended. If they make a claim, this can cause your premiums to rise. It’s best if they purchase their tenant’s insurance policy.
Vehicle damage or theft – While the personal belongings inside your vehicle are covered by your tenants insurance, the vehicle itself isn’t. You’ll need a comprehensive auto insurance policy for this.
Damage caused by pests and bed bugs – Pest removal and repair/medical expenses caused by them isn’t covered by tenants insurance.
Flood damage – This also isn’t covered by standard policies, but you may be able to purchase additional coverage for the damages caused by flood.
Final Thoughts
Hopefully, we’ve helped to answer any questions you’ve had about tenant’s insurance in Canada. Remember, while not mandatory, renters insurance can be an inexpensive way to give you financial security and peace of mind.
Knowing how tenant’s insurance can protect you and how to file a claim can help you make more informed decisions when purchasing an insurance policy as a renter. If you require tenants insurance or are looking for more advice, then contact Buckler Insurance today to see how we can help.
