Here’s Why You Need a Tenant Insurance Policy
If you rent an apartment, condo unit, or house, do you need to buy a tenant insurance policy to protect yourself and your belongings?
Tenant insurance, also known as renter insurance, usually costs between $15 to $30 per month, depending on the province in which you live. Yet data from research firm Statistica suggests that nearly half of the tenants in Canada (47.8%) cite the cost as the No. 1 reason they don’t have tenant insurance. More alarmingly, the Insurance Bureau of Canada estimates half of all renters in this country don’t have any protection at all.
Is it worth the money? Making that determination requires a quick overview of what a tenant insurance policy coverage provides, and dispelling a few of the most common myths people have about it.
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What Does Tenant Insurance Cover?
A tenant insurance policy is typically made up of three components:
- Coverage for your possessions. Many folks 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 own. A typical tenant insurance policy will protect your personal property from damage or theft.
- Coverage for your living expenses. If you’re not able to live in your apartment while repairs are being made after an insured loss like a fire, your tenant insurance policy will help pay some of the expenses. Things like hotel bills, restaurant meals, and moving costs are usually covered if you were unable to live in your apartment.
- Liability coverage. Even though you don’t own the digs you live in, you may still be held liable for damages you cause or injuries to others. For example, the damage caused by a kitchen fire in your home may not be limited to your 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?
Some of the reasons why renters choose to do without tenant insurance appear to be based on popular myths:
Myth: Tenant Insurance Is Too Expensive
Tenant insurance is relatively inexpensive. Typically, a policy will run you a couple hundred dollars a year. 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 You 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. According to Statistica’s data, 24.3% of Canadians believe they don’t have much to insure, and therefore, feel no need to protect their possessions. Don’t underestimate the value of your belongings. Look at each room of your apartment, and you’ll see there’s a lot of furniture, electronics, clothing, small appliances, gadgets, linens and housewares. Do you have the money to replace everything you own should the worst happen, like a fire? Few people do.
Renting a home, condo unit, or apartment may seem risk-free, but your landlord’s insurance policy doesn’t protect you from being liable for any damage to your property or the people in it.
All renters need a tenant insurance policy that’s tailored to their unique needs. Not all policies are the same, so take a few minutes to compare policies and quotes to find the coverage that suits you best.