What is Tenant's Insurance? (And Why Do You Need it?)
Before becoming a homeowner with a mortgage, most Canadians will rent for a number of years while they build their net worth and as a result they will likely have to purchase their first insurance as individuals, tenant insurance.
Tenant insurance is required by most landlords and property rental agencies and is included in the terms of most leases. Tenant insurance is meant to cover you if something in your unit is damaged or stolen, as well as if an event in your unit leads to damage elsewhere in the building. Furthermore, similar to home insurance, tenant insurance can also cover you for personal liability, such as someone slipping and falling inside your apartment.
There are three categories of coverage included in tenant insurance, these include contents insurance, liability coverage, and additional living expenses.
Let us break these concepts down for you:
Contents insurance: This covers the cost to repair or replace furniture, electronics, and other various home goods, such as dishware. Often renters will under value the importance of contents insurance because they purchased all of their items individually over many years and do not realize how much the total cost would be to replace everything at once. It’s important to know that your insurer determines whether something gets repaired or replaced in the event of a claim.
Liability Coverage: As mentioned, this is meant to protect you from future litigation if someone injures themselves in your apartment. Coverage can vary depending on how protected you would like to be, with policies ranging from $1–2 million in coverage.
Additional Living Expenses: This protection is meant to help you with cash flow and making ends meet if you are displaced from your home due to an incident. Expenses such as hotel bills, moving costs, and some meals would be covered while your home is brought back to being livable.
The level of your coverage is categorized into two types, the first is all risks, and the second is named perils. If you would like peace of mind, and are willing to pay a little more for it, all risks is a better choice for you. It covers all of your contents against a wide range of circumstances and only excludes those specified in the policy.
Named perils is a cheaper option, but only covers you for situations specified in the policy. This option can save you a little money, but may leave you exposed to the unforeseen. This is not the only factor determining the price of your premium. Tenant insurance prices are affected by the amount of insurance needed, the location of your residence, how your building was constructed, your individual claims history, and the insurance provider you choose.
If you’re in need of tenant insurance you can buy it directly through our website in less than 5 minutes. It’s quick, simple, and best of all, you don’t need to phone a broker.