Whether you’re renting your very first apartment or embarking on property ownership as a landlord, there are coverage differences to be aware of. When there is a claim, whose policy steps in? Read on to learn what is covered by renters insurance and landlord insurance.
What is renters insurance?
Renters insurance, also known as tenant insurance, is for people renting an apartment or house. It protects the things your landlord's insurance policy doesn't, including coverage for your contents in the apartment (everything you own!) and liability coverage, should an incident happen in your apartment. Some landlords require renters insurance as part of the lease agreement.
Many argue that renters insurance is not necessary, perhaps you don’t believe you own anything of value. However, have you considered how much it would cost you to replace all your clothes, furniture and technology like televisions, tablets and smart phones? Read more about 5 reasons you need tenant insurance.
What is landlord insurance?
If you rent a room in your home; rent apartments in a triplex or lease commercial space to businesses, you’re considered a landlord and should have landlord insurance. Landlord insurance provides financial protection against damages while your property is being rented by a tenant, as well as liability coverage should an incident occur (like a trip, slip or fall) on the grounds of your property. As a landlord, it pays (literally) to know what you are responsible for.
Renters insurance vs landlord insurance
Remember, every policy is different. Be sure to talk to your insurance broker to determine exactly what is covered under your policy. Below is a chart illustrating what is typically covered under renters and landlord insurance.
|What does renters insurance cover?
||What does landlord insurance cover?
- Liability Insurance - in case you are sued for accidental damage or injury within your apartment or house.
- Contents coverage - including clothing and furniture.
- Additional living expenses protection - this coverage reimburses you for a hotel stay if your apartment is inaccessible due to a covered incident (such as smoke damage or mould clean up).
- You can request additional coverage, such as coverage for jewellery and fine art, sewer backup, flood protection, and overland water coverage.
- Physical damage to the building brought on by fires, weather conditions (wind, hail, lightning), and other perils. This includes any attached or detached structures, such as garages, parking spaces, fences, and gates.
- Physical damage to belongings owned by the landlord that are used for property maintenance, such as gardening tools, equipment, snow blowers, lawnmowers etc.
- Personal liability against lawsuits resulting from property maintenance negligence that causes injury to a tenant or visitor.
- Optional coverage is also available for vandalism, theft, renovation, and items that are under construction.
Who’s at fault? Example scenarios
To further illustrate the difference between renters’ insurance and landlord’s insurance, let’s examine three scenarios to determine whose policy will step in to cover the claim for each.
A fire starts in an apartment and causes damage to an adjacent apartment and their belongings.
The landlord’s policy will cover the loss to the building and the repair costs. The renters’ policy will cover the loss or damaged to the tenant’s belongings (minus the deductible), as well as cover expenses for temporary living quarters (ie: a hotel stay), clothing and emergency supplies.
Someone trips and falls in a renters’ apartment and is injured.
The renter’s liability coverage would come into effect. If someone is injured in a stairwell or on the grounds of the property due to negligent maintenance, a claim could be made against the landlord’s liability policy as well.
An apartment is broken into and the stereo, television, and some jewellery are stolen.
Since these items belong to the renter, the renter’s insurance policy would cover this claim. Note that if you want items such as a piece of jewellery or collectibles insured for a specific value, you this must be listed on your policy. Ask your broker for more details on finding coverage for your very special items.
Contact an experienced broker at BrokerLink
Whether you’re renting or you’re a landlord, BrokerLink insurance experts can advise you about coverage that’s best for your needs. Talk to an expert today - we’re here to help!
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Renters and Landlord Insurance FAQs
Are damages to my personal property covered by renters' insurance after a catastrophic event?
Yes, renters insurance covers your personal belongings in the event of a covered natural disaster. The landlord’s insurance coverage will handle damage to the home or apartment building. Note that flood coverage is not included on most renters’ insurance policies, however, it may be added to your policy.
Why is landlord insurance more expensive than homeowners’ insurance?
Landlord insurance costs can be significantly more than homeowners’ insurance policy because landlords are assuming risks for multiple unknown people. Insurance companies often see lower average claim amounts and fewer claims for an owner-occupied home when compared to tenant occupied rental properties.
What factors influence the cost of renters’ insurance?
The exact cost of tenant insurance varies, based on different factors, including:
- The value of your personal belongings
- Your address
- The amount of liability coverage you purchase
- Your claims history