If you rent a property in Canada, then you can benefit from tenant insurance. A type of home insurance, tenant and renters insurance is designed to meet the needs of renters by protecting their property and valuables. To learn more about what tenant insurance is and how it works, keep reading.
Understanding tenant insurance
Tenant insurance, which is also called renters insurance, helps cover the cost of damages or losses faced by tenants. Specifically, such a policy can compensate the tenant for items not covered by landlord’s insurance. For example, if a fire broke out in your apartment and damaged your furniture or electronics, you could be reimbursed for the cost of repairing or placing these items under your tenant insurance policy. Tenant insurance exists because without it, tenants would have to cover the cost of damages out-of-pocket, which could be expensive. Even if the value of your personal items is relatively inexpensive, the cost of replacing them could still be a lot, especially if multiple items were damaged at once. Therefore, the primary purpose of any tenant insurance policy is to financially protect the policyholder from risk. You can contact BrokerLink to learn more about why tenant insurance matters and the common reasons you need tenant insurance.
Tenant insurance coverage
Tenant insurance coverage varies between insurance providers and policyholders. That said, you can generally expect your tenant insurance policy to feature the following types of coverage:
Content(s) / personal property coverage
Contents coverage, also known as personal property coverage, is a core component of any tenant insurance policy. Since the physical structure of your leased space should be covered by landlord insurance, what you mainly need to protect as a tenant is the personal belongings inside your rented home. That’s exactly what contents or personal property insurance covers. In the event that personal items in your home, such as clothing, jewellery, furniture, sporting equipment, or electronics, are damaged or lost due to a named peril in your policy, you can be reimbursed under the contents coverage portion of your tenant insurance policy.
Named perils vary between policies but may include everything from theft and fire to lightning, smoke, vandalism, and more. When adding contents coverage to your renters insurance policy, you must ensure that you purchase enough to cover the estimated value of the items in your home. If you have items of high value, like musical instruments, artwork, or vintage wine, you may need to purchase an add-on. Speak with a licenced BrokerLink insurance advisor if you need help determining your ideal contents coverage limit.
Personal liability coverage
Personal liability coverage is another type of coverage commonly found in tenant insurance policies. Liability coverage for tenant insurance is comparable to the type of liability insurance found in standard homeowner’s insurance policies. The purpose of it is to protect you if you or any visitors of yours accidentally caused property damage to the building.
This type of coverage can be claimed whether the property damage is caused to your specific rented unit or the building in general. Personal liability coverage for tenant insurance also protects you against third party claims of bodily injury, such as if a guest injured themselves while visiting your home. For recommendations on how much liability coverage to add to your tenant insurance policy, contact BrokerLink.
Additional living expenses coverage
Many tenant insurance policies in Canada also contain additional living expenses coverage. This comes in handy if your home is damaged and you are forced to temporarily relocate while it is being repaired. This type of coverage will reimburse you for the cost of the additional expenses incurred during this time, which may include moving expenses, hotel bills, and meals. As with any type of coverage, additional living expenses coverage has its limits. For example, some insurance companies will only cover your living expenses for a maximum number of days or weeks.
In addition, it’s important to emphasize the word “additional,” as this type of coverage is meant to compensate policyholders for expenses above and beyond regular expenses. Thus, if you pay $1,000 a month in rent, and you temporarily have to pay $1,200 a month to stay in a home share or hotel, your insurance provider will reimburse you for the extra $200 a month you are now paying. Lastly, please note that additional living expenses coverage can only be claimed in the event that the damage to your home is caused by a covered peril. Covered perils are those which are specifically named in your policy and may include theft, fire, flood, etc.
How much tenant insurance coverage do I need?
When purchasing tenant insurance, it’s always a smart idea to ask yourself, “How much coverage do I need?” Ultimately, the amount of coverage a policyholder needs varies. It depends on various factors, like the value of your belongings and the main risks that you face and want to protect yourself from. Generally speaking, insurance professionals suggest purchasing enough tenant insurance to cover the cost of replacing all of your personal belongings in the event of a total loss. However, in addition to this, you may want to purchase additional renters insurance coverage in the form of a rider or endorsement. Some of the most common types of extra coverage added to tenant insurance plans are as follows:
Overland water coverage
Overland water protection is a type of flood insurance that can protect your property from water damage that originates from a source of freshwater. For example, this type of coverage may protect you against flooding caused by a nearby lake or river, heavy rainfall, or rapid snow melt. If your leased home is near a major body of water and you live in a low-lying area or on a low floor of an apartment building, this type of coverage might be worthwhile.
Sewer backup coverage
Sewer backup coverage is another type of flood insurance that many tenants choose to add to their policies. This type of coverage can protect you in the event that wastewater or sewage backs up and comes out of the drains in your home. Sewer backups are known for causing extensive damage, especially to basements or buildings below sea level. If you believe your rented home is at risk of a sewer backup, purchasing this kind of coverage could be wise.
Additional contents coverage
One final type of optional tenant insurance coverage that many policyholders opt for is additional contents coverage. Sometimes standard contents coverage isn’t enough. If you have many high-value items in your home, additional protection might be necessary. If you aren’t sure whether the items in your home necessitate additional contents coverage, contact a local BrokerLink insurance advisor.
What is not covered by tenant insurance
As you now know, tenant insurance comes with a variety of coverages, from personal liability to personal property. However, there are many risks and incidents that are not covered by tenant insurance. Knowing what these are before you purchase a policy is crucial. A BrokerLink insurance advisor can also walk you through your renters insurance policy and outline any exclusions or limitations. The following is a list of situations generally not covered by tenant insurance policies in Canada:
While tenant insurance may cover the cost of replacing stolen items from your home, such as furniture or clothing, it does not cover damaged or stolen vehicles. Rather, vehicle damage would be covered by your auto insurance policy. Although to ensure your car is protected from theft, you would have to add comprehensive coverage to your car insurance policy, which is optional.
Damage caused by pest or animal infestations is another incident that is not typically covered by tenant insurance. For example, if cockroaches or bed bugs were to cause property damage in your rented home, your tenant insurance policy is unlikely to cover the cost of repairing or replacing the affected items, nor would it reimburse you for the cost of hiring a pest exterminator.
It is important to note that many tenant insurance policies do not cover damage to your unit caused by pets. Therefore, if you have a cat, dog, or other pet living with you, you would be responsible for covering the cost of any damage they cause. In the event that your insurance provider does offer coverage for pet damage via tenant insurance, there would likely be several restrictions. For example, your insurer may stipulate that coverage does not extend to certain breeds of dogs that are deemed “high-risk” or those with an aggressive pattern of behaviour, such as a bite history.
Property damage to the building
While tenant insurance is meant to cover damage to the policyholder’s belongings, it stops short of covering damage to the building. Why? Property damage to the building is typically covered by the landlord’s insurance policy. To learn more about landlord vs. tenant responsibilities, contact BrokerLink today.
Mandatory tenant insurance in Canada
Many first time renters wonder if tenant insurance is mandatory in Canada, so we are here to set the record straight. Tenant insurance is not a legal requirement in Canada, meaning that it is not mandated by the federal government or any provincial government. That said, you might still need tenant insurance. Landlords throughout the country are allowed to require tenants to purchase tenant insurance in order to qualify for a lease. In other words, if you want to live in a specific rented home, you might need to take out tenant insurance coverage and show proof of it to your landlord.
Some landlords might even require tenants to purchase a specific amount of coverage, such as $1,000,000 or $2,000,000 in liability coverage, while others will simply require the tenant to purchase a policy of any kind. The reason that some landlords require tenant insurance is that it protects them. Without it, landlords would have to worry that a tenant would attempt to recoup any expenses incurred following an incident from the landlord. But if the tenant has an insurance policy, the landlord’s liability is minimized. You can find out more about mandatory tenant insurance in Canada by getting in touch with a home insurance specialist at BrokerLink.
The cost of tenant insurance
Tenant insurance costs vary widely across Canada. However, one of the most common tenant insurance myths is that it is expensive, when in reality, renters insurance is often much cheaper than standard homeowner’s insurance. In Ontario, the average tenant insurance policy costs between $20 and $30 per month. Of course, prices vary depending on where you live, your claims history, as well as the types of coverage, limits, and deductibles you choose. Please note that choosing a deductible for your tenant insurance policy is not something to be taken lightly. Should an incident occur, you will be responsible for paying your deductible before your insurance company steps in to cover the rest.
Therefore, you must select a deductible that you could reasonably afford to pay in the event of an incident. Keep in mind that deductibles are one of the main factors that will impact the cost of your tenant insurance policy. If you choose a lower deductible, your renters insurance premium will likely be higher because you are taking on less financial responsibility in the event of a claim. Conversely, if you select a higher policy deductible, your premiums are likely to be lower but you will have to pay more for an approved claim.
Contact BrokerLink to learn more about tenant insurance
If you have questions about tenant insurance or want to purchase a renters insurance policy, get in touch with BrokerLink today. We have an entire team of home insurance experts dedicated to helping tenants like yourself find a great policy. They can offer advice on which coverage limits and deductibles to choose, as well as give you tips on how to save money on tenant insurance. Of course, as licenced insurance brokers, we can also shop around on your behalf to find you the best possible tenant insurance coverage at a competitive rate. No matter your tenant insurance needs, contact BrokerLink today to get started. You can also get started now by requesting a free quote on our website. Other ways to get in touch? Give us a call or visit us at any one of our 200+ branches in Canada.
Tenant insurance FAQs
How much does tenant insurance cost?
The average cost of tenant insurance in Canada is between $20 and $30 per month, though premiums vary between policyholders. Factors that impact tenant insurance premiums include your location, claims history, and the coverages, deductibles, and limits you choose.
How can I purchase tenant insurance?
Purchasing tenant insurance is easy when you work with a broker. While you can purchase it directly from an insurance agent, going through a broker will ensure you find the best policy for your needs and budget. Tenant insurance policies can be purchased online, over the phone, or in person, and the process can often be completed in under 30 minutes.
How do I renew my tenant insurance policy?
Renewing tenant insurance is as easy as renewing any other type of insurance. In most cases, your policy will renew automatically. However, rates can change from year to year so it’s best to review your policy with help from a broker before letting it automatically renew. If your policy does not renew automatically but you would like to renew it, contact your local insurance broker or insurance agent via phone, email, or in person and request that your policy be renewed.
Are tenant insurance and renter’s insurance the same?
Yes, they are simply two names for the same type of insurance. Both tenant and renters insurance are a form of home insurance designed to protect renters of homes against a wide range of risks.
Do I need to purchase home insurance if I rent my home?
Home insurance is important, whether you own your home or rent it. Depending on whether you rent or own your home, a different policy will be necessary. Tenant insurance is designed specifically for renters, and while it may not be mandated, your landlord may require you to purchase it. Even if your landlord has no such requirement, buying tenant insurance as a renter is important and is the only way you will be covered for the cost of losses or damages relating to your rented space. On the flip side, if you are the homeowner who is renting your home to others, it is important to maintain landlord insurance in the event that anything were to happen to the home so that you can be compensated for the building and your belongings inside, such as appliances.
Does tenant insurance cover natural disasters, such as earthquakes?
There are two types of natural disasters that tenant insurance may cover, and they are earthquakes and floods. That said, these are not included with standard tenant insurance policies so you will need to specifically add these types of coverage to your policy if you want to be protected against them.
How do I get a tenant insurance quote?
Getting a tenant insurance quote is free, quick, and easy. All you have to do is contact your local insurance broker online, over the phone, or in person and request a free quote. They will ask you some basic questions about yourself, your home, and the type of tenant insurance coverage you are looking for, and from there they will get back to you with an estimate.
How do I file a tenant insurance claim?
The claims process varies between insurance providers. Generally, you can file a claim online via your insurance company’s website. You will need to provide various information when filing a claim, which includes information about the incident - ideally with photographs. From there, someone from your insurance company will reach out to discuss your claim in further detail. They may send an insurance adjuster to assess the damage before approving or denying your claim. If you work with an insurance broker you will have the opportunity to get in touch with your broker regarding your claim at any time that you have questions or concerns about your claim. Brokers can assist you in the claims process or help you get in contact with someone who can.
Does landlord insurance protect me as a tenant?
Landlord insurance may protect tenants in certain scenarios, such as if a tenant causes property damage to the building’s structure, such as to the walls or plumbing system. However, landlord insurance does not provide any coverage for a tenant’s personal belongings in the event of damage. Landlord insurance also will not cover tenants for personal liability claims relating to injuries that occur inside your rental unit. Lastly, landlord insurance will also not cover the tenant if they are forced to temporarily relocate during repairs following damage to their unit.
Can people living in the same home share a tenant insurance policy?
If you share your home with another person, such as a partner or roommate, you might be able to share a tenant insurance policy with them. Many insurers allow policyholders to share tenant insurance policies with other residents of the same unit. To do so, you will need to provide information about each occupant, and their names will need to be added to the policy. Please note that some insurance providers have limits on the number of people who can be added to a single policy.
Does tenant insurance cover water damage?
Tenant insurance will only cover water damage if you add flood coverage to your policy, such as overland water and sewer backup coverage. Therefore, not all policies cover water damage. If your home is at risk of water damage, we recommend adding flood insurance, such as overland water coverage or sewer backup coverage, to your tenant insurance policy, and an insurance broker can help you do this.
If you have any questions, contact one of our local branches.