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Don’t Think You Need Tenant Insurance? Reasons Why You Do

June 10, 2016

More than half of renters underestimate the need for tenant insurance.

Renters insurance, also known as tenant insurance, is inexpensive and easy to get; yet many people who rent where they live, don’t bother with tenant insurance, putting themselves at great financial risk.

A study by belairdirect suggests that more than half of tenants in Canada (53 per cent) don’t have the protection they need should something go wrong.

What does renters insurance cover?

A tenant insurance policy is typically made up of three main components:

  • Coverage for your belongings, the stuff you own.
  • Your living expenses if you’re unable to live in your home as a result of an insured loss.
  • Liability should you be sued by someone who visits your home, or lives in another unit.

The stuff you own

Sixteen per cent of those surveyed believe that the landlord will be on the hook for all damages and risks; however, this is not true. You are responsible for insuring your personal property; the landlord is only responsible for insuring the building—not the contents you house in it.

A typical tenant insurance policy will protect your personal property from damage or theft.

Your living expenses

If you’re not able to live in your apartment while repairs are being made after an insured loss like fire, your tenant insurance policy will help pay some of the expenses that you’ll run into. Things like hotel bills, restaurant meals, and moving costs would normally be covered as they’re living expenses you wouldn’t typically have if you were able to live in your home.

Your liability

Even though you don’t own your home, you may still be held liable for damages you cause or injuries that happen.

For example, the damage caused by a kitchen fire in your home may not be limited to your own space, and you could be held responsible for the cost to repair other parts of the building. The same would be true if you left a tap running; it could fall on you to pay for the repairs to your unit, as well as those beneath or beside you. As for injuries, if someone takes a tumble in your home and is hurt, you could be held liable for the costs associated with things like their medical expenses and time away from work.

Why don’t some renters get tenant insurance?

The study also highlights some of the reasons why some renters choose to forgo renter’s insurance; many reasons which are based on myths.

Myth: Tenant insurance is too expensive.

So how much does renters insurance cost?

Renters insurance is generally pretty inexpensive. Typically, a tenant insurance policy will run you a couple hundred dollars a year; about a dollar a day. Of course premiums will vary, depending on things like how much coverage you need, where you live, your chosen deductibles, and claims history, for example.

Myth: Tenant insurance is unnecessary if I live in a good neighbourhood.

Living in an upscale, “good” neighbourhood does not protect you from risks like fire, water damage and theft. These situations can happen to anyone, anywhere, and tenant insurance can cover these risks.

Myth: Your possessions aren’t worth covering.

Undervaluing the costs of ones’ valuables happens often. In fact, 25 per cent of survey respondents believe this to be true, and therefore, feel no need to insure their possessions.

Don’t underestimate the value of how much you really own. Look at each room of your home and you’ll see there’s a lot of furniture, electronics, clothing, small appliances, gadgets, linens, and housewares. Would you have the financial means to replace everything should the worst happen, like a fire? Few do.

It’s your possessions and more: Get tenant insurance today for protection

Renting a home, unit or apartment may seem risk-free, but it doesn’t protect you from being liable for any damage to your property or the people in it. The best thing a renter can do to protect themselves is to look into tenant insurance, and compare tenant insurance quotes to find the coverage best suited for their needs.