As a tenant or renter, most are aware that landlords have insurance on their building – walls, floors, doors, light fittings and appliances. However, as a tenant you need to be aware that a landlord’s insurance does not cover your personal belongings.
Landlords have relatively few legal obligations to compensate tenants for damage to, or loss of, their personal possessions. Tenants, on the other hand are held financially responsible for the harm they cause to any part of the building in which they live or to others who live or visit there.
For example, if your cooking accidentally starts a fire that spreads to other units or another part of your building, you may be responsible for paying the costs of repairing all damage to the building (including other apartments) and also for replacing anything that’s damaged in other tenants’ units.
Why do I need tenants insurance?
Tenant insurance helps you pay for damage to your personal property caused by theft, fire, smoke damage and vandalism to name a few.
- Your landlord’s insurance will not cover your personal belongings. Even if you don’t own a lot of expensive things, it can be very expensive to replace all your valuables (jewellery, computers and other electronics, sports equipment, artwork, furniture, books, entertainment devices, kitchen utensils etc).
- You may not be protected against personal liability should you accidentally damage a neighbour’s property or should a guest to your home cause these damages. You may also be held legally responsible if someone were to be injured while visiting your home.
- Your landlord’s insurance most likely does not cover any upgrades you may have made to your rental unit and paid for yourself. For example, you may have added built-in shelving or installed upgraded carpets.
Tenants insurance coverage
Tenants insurance policies will differ from insurer to insurer, but they generally include two basic kinds of coverage – liability and contents.
Liability coverage is comparable to the liability coverage in a typical homeowner’s policy and protects you if you or your guests cause accidental damage to the building – whether to your unit or to the whole building. This coverage may also protect you if someone is injured in your rental unit and sues for damages.
Contents coverage allows you to replace or repair your belongings if they are lost or damaged in the event of fire, vandalism or theft. Belongings may be covered even if they are temporarily not in your home.
Most people are very surprised by how much it would cost to replace everything – all at once. You need to insure for an amount representing the replacement cost of all your belongings.
Tenant’s insurance policies also include additional living expenses which provides for expenses incurred (as a result of a covered loss) if you cannot live in your home. This feature will cover hotel or other rental costs and in some cases meals. Be sure you know how long an insurance company is willing to pay living expenses – sometimes the insurance company will limit the costs to what they consider a reasonable amount of time.
Ask your broker at Canada Brokerlink to explain exactly what the policy will cover and what it doesn’t.
- Replacement cost
- Scheduled articles coverage
Tenants insurance for students: Do you need it?
Students living away form home while attending school are most likely covered for liability and contents under their parents’ homeowner’s insurance policy.
However, if the student has made a permanent move away from their parents’ home, a separate tenants insurance policy is required.
How much does tenants insurance cost?
Tenants insurance is widely available at low cost. When you consider what it would cost to replace everything, paying as little as twenty dollars in monthly insurance premiums is pretty reasonable by comparison.
Minimize stress later – take an inventory now.
After a fire or a break-in, do you think you could remember all the details that went into creating your home and what everything cost? We recommend that you take the time now to make a record of your belongings which will help minimize the worry later. Keep any bills, receipts, warranties and instructional manuals – they can serve as proof of ownership. Keep this information in a safe place, such as a fire-proof box or safety deposit box, and review it annually. It’s also good practice to take pictures or video footage of all your valuable possessions.
Getting the appropriate tenants insurance coverage can bring peace of mind. For more information, talk to one of our brokers today. We’ll work with you to compare your insurance options and get you the best value and most appropriate coverage possible.