Home insurance vs. tenant insurance

According to Statistics Canada, about two in three Canadians live in an owner-occupied home, while about one in three rent. Whether you're buying or renting, one thing's for sure—you need insurance. Tenant insurance (also called renter's insurance) and home insurance both fall under property insurance, but they’re not the same. Each one provides different types of coverage to help protect you, so it’s important to know the difference.

What is the difference between home insurance vs. tenant insurance?

The biggest difference between home insurance and tenant insurance comes down to structure coverage. Home insurance, or homeowners insurance, covers the actual building, including the walls, roof, and any attached structures like a garage. As a property owner, you need to protect the physical property. Tenants don't own their rental units, so they don't need coverage for that. A homeowner's insurance policy also generally covers everything inside the home.

On the other hand, tenant insurance is designed specifically for renters, focusing on personal belongings and liability rather than the building itself. If you're renting, your landlord’s insurance policy covers the structure, but not your possessions or liability. That means if there’s a fire, theft, or accidental damage, tenant insurance protects you financially by helping replace your belongings.

What does home insurance cover?

Home insurance is for homeowners—it protects both your house and everything inside it. It’s a comprehensive policy that covers just what a homeowner needs, including:

Your home itself

This is known as dwelling coverage. If a fire, storm, or other covered disaster damages your house, home insurance helps pay for repairs. It may also cover detached structures on your property, like a detached garage, fence, shed, swimming pool, or gazebo.

The types of damage covered by home insurance depend on your policy and insurer, but most plans protect you from these common risks, known as "named perils":

• Fire and smoke
• Water damage
• Electrical issue
• Wind & storm damage
• Explosions
• Civil unrest
• Natural disasters
• Vandalism & theft
• Vehicle impact

Your belongings

Contents coverage covers furniture, appliances, electronics, and clothes. If they’re stolen or damaged by a covered event, your policy can help replace them up to your coverage limit.

Personal liability coverage

If someone gets hurt on your property, home insurance can help cover medical bills, legal fees, and even potential lawsuits.

Additional living expenses

If your home is damaged and you can’t live in it for a while, your insurance can help pay for a hotel or rental until it’s fixed.

Home insurance provides peace of mind, ensuring that whether it’s a major disaster or a minor mishap, you’re not left to handle the financial burden alone. Plus, many policies can be customized with additional coverage for things like high-value items, home businesses, or flood protection. It’s an essential safeguard for homeowners looking to protect both their investment and their day-to-day lives.

What does tenant insurance cover?

Tenant insurance is designed for renters, giving you protection for your personal belongings and liability coverage in case something goes wrong. It's a lot like home insurance, except it doesn't include dwelling coverage. That falls under your landlord's insurance policy.

But while your landlord’s insurance covers the building itself, it won’t protect your stuff—that’s where tenant insurance comes in. Here’s what it typically covers:

Your belongings

If your furniture, electronics, clothes, or other personal items are stolen, damaged in a fire, or affected by another covered event, tenant insurance can help replace them under your contents coverage up to your coverage limit.

The types of damage covered by tenant insurance under your contents coverage depend on your policy and insurer, but are generally similar to the types of damage covered by home insurance that we listed earlier.

When it comes to renters insurance, how much you’ll get for your belongings depends on the type of coverage you have. If you have replacement cost coverage, your insurance will pay for a brand-new replacement, no matter how old the original item was. If you have actual cash value coverage, you'll only be reimbursed for what the item is worth at the time of the loss.

For example, if your stolen TV was originally $1,000 but is now worth $400, actual cash value coverage would only give you $400. With replacement cost coverage, you’d get enough to buy a similar new TV.

Personal liability coverage

If someone gets hurt in your rented space or you cause damage to their belongings, and they decide to sue, your insurance can help cover legal fees and potential damages.

Additional living expenses

If a disaster like a fire or flood makes your rental unlivable, tenant insurance can help cover temporary living expenses like hotel stays, meals, or even a temporary rental until you can move back in.

Even though it’s not always required, purchasing tenant insurance is a smart investment. It’s usually affordable and can save you thousands of dollars if the unexpected happens. Plus, some policies offer extras like coverage for high-value items (like jewellery or expensive electronics) and even identity theft protection. Whether you rent an apartment, condo, or house, tenant insurance gives you peace of mind, knowing you won’t be left covering big expenses on your own.

Example of tenant insurance coverage

Imagine this—you leave your apartment, completely forgetting to turn off the stove, and a fire breaks out. Your landlord’s insurance will cover the damage to the building itself, but will it cover anything you or your neighbours lose in the fire? That’s on you. Unless you have tenant insurance, replacing your belongings could be an expensive nightmare. But protecting your stuff is only half the reason tenant insurance is so important.

Your landlord’s insurance company will want answers. If the fire department determines the fire started in your unit—and negligence is proven—you could be held legally responsible. That means your landlord’s insurance company might come after you for damages.

Without tenant insurance, you’d be paying out of pocket for legal fees, settlements, and other costs. But with the right policy, you’re covered. It can help pay for a legal defence, cover damages, and even protect you from lawsuits.

Home insurance vs. tenant insurance costs

Tenant insurance is generally much cheaper than home insurance because it doesn’t cover the building itself—just your belongings and liability. That’s a big reason why it’s so affordable. Tenant insurance in Canada usually costs between $15 and $30 a month. Compare that to home insurance, which averages around $1,000 a year or more, and you can see what we mean.

Insurance companies determine pricing based on risk. The more they cover, the more risk they take on, which means higher costs for homeowners who need protection for both their house and everything inside it. Since renters insurance only covers personal belongings and liability, the risk for insurers is lower, so the price reflects that.

Of course, the exact cost also depends on a few factors, like where you live, how much coverage you choose, and even your insurance history.

For example, someone who owns a home that costs $500,000 would need to insure their home for that amount, plus however much their belongings cost to replace. However, a tenant with a bedroom apartment may only need $30,000 in coverage for their belongings. Here are some examples of average insurance costs in Canada:

Also, if you’re in a high-crime area or somewhere prone to floods or wildfires, your premium might be higher. On the other hand, bundling your policy with auto insurance or installing security features can sometimes get you a discount.

Learn more with BrokerLink

Whether you rent or own a home, you should have insurance protection specific to your needs. Ultimately, the option that is best for you is dependent on your financial circumstances and whether you own or rent your home.

Let the BrokerLink insurance experts help you find the tenant or homeowners insurance you need. You can reach us by phone at 1-855-451-8748, by email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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