Every day we face risks – every time we step into a car, every time we start the stove, every time there is a storm – the list goes on and on. And while we can’t always prevent accidents from happening, we can protect our possessions if they do. Living is risky, so we have insurance like tenant insurance in Canada.
Those who own homes purchase “Homeowners Insurance” to protect their belongings in case of fire, water damage, or other accidental damage. But with the help of Tenants Insurance, renters can protect their property too.
What is Tenant Insurance, and What does it Cover?
Tenant Insurance and Renters Insurance are two words that are often used interchangeably. It’sIt’s similar to home insurance in that it protects your belongings, except instead of being for homeowners, it’s for renters.
While there are certain things you don’t have to worry about as a renter (damaged pipes, damage to the property, etc.), you still want to protect your own belongings against things like fire, water damage, and theft. If these events occur, you will receive compensation for your losses through tenants’ insurance.
Tenant insurance can also protect you if your renting property becomes unlivable. Let’s imagine a fire or extensive water damage in the home. You may need to find another place to live temporarily while repairs are being made. In such a case, tenant insurance can help cover these costs while you wait or find a new place to live.
Why is Tenant Insurance Important?
Many tenants are under the impression that they don’t need insurance. After all, any damages to the home or property they are renting are the responsibility of the home or property owner, right? Well, yes, that is true.
Suppose there are ever any extensive damages within the property, like damage to appliances, damage to pipes, or damages to the physical structure of the building. In that case, the responsibility does fall on the landlord.
But while their insurance covers many things, your personal belongings are not. Do you have any furniture that belongs to you? Do you have any jewelry or pieces of value? These are all your responsibility to protect.
Furthermore, if you are found responsible for any damages on the property, the landlord could hold you liable. In such a case, it would be your responsibility to cover the costs of repairs or damages. Without tenants’ insurance, you would have to do this independently.
What kinds of coverage does Tenant Insurance offer?
Coverage will inevitably differ depending on which insurer you choose, but more insurance companies will offer two basic types of tenant insurance coverage.
- Liability coverage: This type of coverage is similar to that of homeowners liability coverage, except it covers portions of the property for which the tenant may be held liable. For example, if you are the cause of any damage to the property or building, liability coverage can help to cover the expenses. It can also help to cover the expenses of damages that occur to any new additions or renovations you have made, as the landlord’s insurance may not cover this. Liability coverage also helps to protect you if anyone is injured within your unit.
- Content coverage: This is the available coverage in case your valuables or belongings become damaged in the case of vandalism, theft, fire, water damage, or other unexpected events. If you ever are in a state of loss, this type of insurance can help cover the cost of replacing furniture, jewelry, or other things in your home that are worth value.
Most insurance companies also offer the option of purchasing a policy for additional living expenses. If you cannot live in your unit/property for any time, this insurance can help cover the costs of meals, hotel rentals, or other living expenses.
Is it mandatory to have Tenant Insurance?
No. It’s not mandatory to have tenant insurance, and it’s not considered illegal if you do not have it. However, your landlord does have the right to request it as part of your renters’ agreement. In addition, even though it’s not mandatory, it is highly recommended. If damage occurs, you want to ensure you are protected.
How much does Tenant Insurance Cost?
Because it’s not a mandatory expense, many people steer away from Tenants Insurance. But the truth is, tenant insurance isn’t that expensive – and it can save you a lot of money in an emergency. In Canada, the average cost of a Tenant Insurance Plan is $23 per month. If you live in an area like BC, you might pay a higher price, around $26, and if you live in Ontario, fees are generally on the lower end, about $21.
Of course, the exact cost of your plan will vary depending on the insurance company you choose and the coverage plan. You can shop around to save yourself money, but in the end, tenant’s insurance is a small yet wise investment.