Tenant Insurance
For the place you’ve made your own.
Imagine you come home from work after a long day only to find that a pipe has burst in the basement apartment you’re renting and there’s water everywhere, your furniture is waterlogged, and all your stuff is soaked.
If you’re like a lot of other people in Canada who rent — and nearly one-third do — then you might assume that your stuff is covered by your landlord’s home insurance, and you wouldn’t be alone.
But the truth is that a landlord’s insurance doesn’t cover tenants or their possessions, and that’s why it’s a good idea to buy tenant insurance when you rent a home or apartment.
TENANT INSURANCE
Tenant insurance, which is also known as renter’s insurance, is a special type of insurance that’s specifically for Canadians who rent their residence, whether that’s an apartment, townhouse, condo, house, basement apartment, or even just a room. Tenant insurance is similar to home insurance in that it protects your belongings and protects you from liability, and it may allow for living expenses if you make a claim.
WHAT DOES TENANT INSURANCE COVER?
Contents
The content portion of tenant insurance will cover the cost to replace or repair personal belongings in case of damage. Items such as clothes, furniture, electronics, and other household items that are lost or damaged are covered if damaged by fire, smoke, vandalism, theft, and/or possible water damage due to plumbing issues.
Additional Living Expenses
Tenant insurance will cover any additional living expenses if you have to temporairly move to another location. Insurance would cover hotel costs, groceries, and other living expenses incurred when repairs or renovations are happening in your home.
Liability Insurance
Liability insurance provides protection against the possibility of being sued if someone is hurt in your home and provides coverage for accidental damage to items owned by others. If that person were to sue you, the tenant insurance would cover any damages or legal fees you had to pay, typically up to $1 million – $2 million in coverage.
HOW MUCH DOES TENANT INSURANCE COST?
In general, you can get tenant insurance which can start for less than $1 per day. There are lots of factors that can impact your premiums, including what province you live in. In Manitoba rates start as low as $20 per month.
Tenant insurance rates will also vary based on the specific town or city in which you live, as well as a number of other factors, such as:
- Type of dwelling, such as an apartment, home, or basement apartment
- How much coverage you want
- Amount of your deductible
- Age of the home
- Insurance provider
- Your personal insurance and claims history
- The client’s age
TENANT INSURANCE FAQ'S
Should I get tenant insurance?
Although tenant insurance isn’t required, it is recommended because it protects your belongings, protects you in case somebody gets hurt in your house, and will cover costs if you have to move out while repairs are happening.
Is tenant insurance mandatory in Canada?
No province in Canada requires renters to purchase tenant insurance. However, some landlords may require it as part of the rental agreement.
Aren't I covered under my landlord's home insurance or my roommate's tenant insurance?
Your landlord will have home insurance that protects the house and their own belongings, but that doesn’t extend to you or any other tenants living on the premises. Similarly, if you have a roommate who has tenant insurance, you’re not covered by their insurance either, unless you’ve been specifically named on the policy. In fact, it doesn’t matter if you’re related to the other tenant or in a relationship with that person — if you’re not listed on the policy, then you’re not covered.
How do I choose the right policy?
As with any insurance policy, there are lots of things to consider when buying tenant insurance. For one thing, you should shop around with different providers to see who offers the best rates and the most comprehensive policies.
When you’re shopping for tenant insurance, make sure you choose a policy that protects all your possessions. For example, if you have special jewelry or family heirlooms you want protected, you might need additional coverage.
Furthermore, make sure the deductible is something reasonable that you can afford. If you have a $5,000 deductible but can’t afford to pay it, then the policy isn’t right for you.
It’s also a good idea to talk to different brokers, because they’ll walk you through your options, give you quotes about premiums, and help you decide on a policy that works for you. A broker will also help you pick between all risk and named peril insurance, and help you decide between cash value or replacement cost reimbursement.
To speak to a knowldegeable broker, contact us today.
Does tenant insurance cover pet damage?
No. But if your dog injured a guest in your house, you would likely be covered by the liability portion of the tenant insurance. Check with your specific policy, because some breeds are excluded from this.
Does tenant insurance cover bed bugs?
No, nor does it typically cover damage from any other type of bug infestation.
How can I lower my tenant insurance premiums?
You can often lower your premiums by reducing the amount of coverage, increasing your deductible, paying annually rather than monthly, bundling your tenant insurance with another policy (eg. car insurance), sharing a policy with other roommates, keeping a claim-free insurance history, and even installing a security system.
What is a deductible?
When you make an insurance claim, the deductible is the amount you’ll be responsible for before the insurance company will cover the rest of the claim. For example, if you have a $500 deductible and make a $1,200 claim, then you’ll be responsible for the first $500 before the insurance company will reimburse you for the remaining $700.
Where do I get tenant insurance?
Tenant insurance is available through most insurance brokerages.
To speak to a knowledgeable broker, contact us today.
Actual Cash Value vs Replacement Cost - What is the difference?
There are two types of reimbursement calculations insurance companies use when claims are made, and you’ll have to decide what kind of policy you want.
The first is actual cash value, and these have cheaper premiums. With actual cash value policies, the insurance company will pay the depreciated value of your items. For example, if you paid $2,000 for your television 5 years ago, the insurance company might determine that it’s only worth $700 today, so they’ll make a settlement offer for $700.
The other type is replacement cost, and these generally have higher premiums. With this type, the insurance company will pay what it actually costs to replace what you’ve lost. With the television example, a replacement cost policy might pay out $1,500, or whatever it costs you to buy a comparable television to the one you lost.
All Risk vs Named Perils Plans - What is the difference?
When shopping around for tenant insurance, one choice you’ll have is between an all-risk policy and a named peril policy. All-risk insurance tends to have higher premiums because the policy covers everything, as long as something isn’t listed as an exclusion. By contrast, named peril insurance has cheaper premiums, but only things listed in the policy will be covered.
As an example, let’s say your named peril tenant insurance specifically lists damage from theft and vandalism, but not from water damage. In that case, you won’t be covered when that pipe bursts and damages all your stuff because water damage wasn’t named on the policy. On the other hand, an all-risk policy would cover you, as long as water damage wasn’t listed as an exclusion.
Does tenant insurance cover damage to the building?
Tenant insurance doesn’t cover the building or the home itself. Your landlord will have their own home insurance for that. Similarly, tenant insurance doesn’t automatically protect you in case of a flood from an external source (like heavy rain or an overflowing river), and most policies will require an overland water rider if you want this type of protection.
Will I have coverage if I sublet my home to someone else?
Tenant insurance won’t cover you if you sublet your home to somebody else, and that includes renting it out short-term through sites like Airbnb.
Put your money where your house is.
