Does renters' insurance covers damage to the landlord's property?

Picture yourself moving into a new apartment, excited to make it your own. You’ve got your favorite things, like furniture and photos, all set up. But what if something unexpected happens, like a fire, a burst pipe, or a guest getting hurt? That’s where tenant insurance comes in.

Tenant insurance, also called renters or apartment insurance, is a policy that protects renters and their belongings from theft, fire, and other common risks. It also makes it clear who is responsible for what in case of losses or damage taking place, so there are fewer arguments.

Here’s how renter’s insurance works and what it usually covers.

Who is responsible for accidental damage to the rental property?

Generally, tenants are responsible for accidental damage that they cause to the rental property. They need to make sure they (or their guests) don’t cause any damage, as they will have to pay for repairs.

Tenant insurance usually covers damage to other people’s things, but not always the rental property. For example, if you break a window while playing catch, you might still have to pay for it, even with insurance.

Landlord insurance covers the building, including windows, but if you cause the damage, they might ask you to pay. So, if you crack a window, you might have to cover the repair cost, even if you have renter’s insurance.

The cost will come out of your pocket, either right away or from your security deposit when you move out.

Read more: Will home insurance cover packages stolen off your porch?

What does tenant insurance cover?

Tenant insurance is insurance specifically designed to protect tenants. It differs from normal property insurance, in that it doesn’t cover most damage to the structure of the building, and rather, focuses on contents of the unit itself.

Tenant insurance typically comprises three main parts:

Content insurance

This part covers loss or damage to the content of your home, particularly your personal belongings. This includes items like clothes, furniture, electronics and other household items.

Liability insurance

Liability insurance offers financial protection if someone decides to sue you after getting hurt in your home. Liability insurance will cover the costs, including legal fees and damages.

Additional living expenses

If your home becomes unlivable due to an insured peril like fire or flooding, this part of the insurance will cover extra costs like hotel stays, groceries, and other living expenses while your home is being repaired.

Understanding these parts shows how tenant insurance protects your belongings and your finances.

Read next: What’s the best way to insure your belongings if you live in an assisted living facility?

Does renter’s insurance protect and benefit the landlord?

Renter’s insurance doesn’t directly cover the landlord, but it can help both the landlord and the renter.

For renters, this insurance covers their belongings if they get stolen or damaged. It also covers accidents if someone gets hurt in the rental.

For landlords, having tenants get renter’s insurance means they won’t be responsible for the tenant’s belongings if something happens. It also protects them from lawsuits if a tenant’s guest gets hurt on the property. This is why some landlords require renter’s insurance.

Landlords have their own insurance to protect their property and cover their own risks. They can’t use your renter’s insurance for their property. This is why it’s important for both landlords and renters to have their own insurance. When both are covered, it protects everyone and reduces potential conflicts.

Read more: Why you need renters insurance — and what to look for in a policy

What happens if I damage rental property?

If you or your guests cause damage on purpose or by being careless, you usually have to fix  it or pay for the repairs. These include broken windows caused by roughhousing or throwing objects, stains on carpets from spills that weren't cleaned up properly, and holes in walls from hanging heavy items without proper care.

However, normal wear and tear isn’t your responsibility. Normal wear and tears include things like paint fading from sunlight, door handles becoming loose from regular use, and appliances showing signs of age, like minor dents or not working as well as they used to. These are not the tenant’s responsibility to fix or replace; the landlord takes care of these maintenance tasks.

In case a damage does take place in your rental property, and it wasn’t done on purpose or by being careless, here’s what can happen:

• If the damage was there before you moved in, you shouldn’t have to pay for repairs. Make sure to note any damage when you move in to avoid being blamed later.
• If the damage was an accident but not due to negligence, tell your landlord right away. They would cover the repair costs, especially if it’s something that could be considered normal wear and tear. For example, if an appliance breaks down due to age or there is water damage from faulty plumbing, these are typically issues the landlord would handle.
• Any accidental damage to a tenant’s personal belongings would be covered by tenant insurance. For damage to your  furniture from things like fire, theft, or water leaks from plumbing. Check your policy to see what’s included and think about filing a claim if needed.

Tenants should run through a few considerations before making a claim. First, the damages should exceed the amount that you’ve listed as your deductible (i.e., what you agree to pay before the insurer covers the rest). If the damage is less than your deductible or a little bit more, it won’t be worth making the claim as you’ll likely pay more over time in higher premiums.

Another consideration is your taxes. If you get an insurance payout for the damage, you might need to report it as income, which might increase the amount of income tax you owe come tax time. However, you may be able to claim certain repair costs as a deduction, depending on your situation.

What happens if someone gets hurt on my rental property?

If you live in an apartment or condo, you are responsible for your guests inside your unit. This means if a visitor gets hurt inside your apartment or condo, your tenant insurance will typically cover the costs.

However, if a visitor gets hurt in common areas like the elevator, lobby, or hallways, the landlord is responsible. The landlord’s property insurance will cover injuries that happen in these shared spaces.

So, make sure you have insurance to cover any injuries inside your unit, while the landlord takes care of the common areas.

How much does tenant insurance cost?

Tenant insurance in Canada generally ranges from $15 to $50 per month. However, there are several ways to reduce this cost:

• Many insurance companies offer discounts if you combine your tenant insurance with your car insurance.
• Opting for a higher deductible can lower your monthly premium. Just remember, this means you’ll pay more out-of-pocket if you need to make a claim.
• Installing safety systems like smoke detectors, burglar alarms, and fire extinguishers can also help you get a discount.

By taking advantage of these options, you can make your tenant insurance more affordable.

However, if you think you can’t afford tenant insurance, remember that you probably can’t afford not to have it. The cost of replacing your things after a fire or other disaster would be much higher than the monthly insurance fee.

Also, make sure to learn about your rights as a tenant. Knowing what your landlord should take care of can help you avoid paying for things that aren’t your responsibility. For example, landlords are in charge of correcting structural problems, plumbing issues, and any damage that was there before you moved in. Understanding your rights helps make sure you’re not unfairly charged for repairs or replacements.

Knowing what tenant insurance covers and what renters and landlords need to do if something gets damaged makes renting easier and safer.

Lastly, remember that not all landlords are the same, and they might handle damages differently. If there’s damage to the unit, like the floors or a door, the landlord might decide to fix it and pay for it themselves. They could then increase the rent for the next tenant to cover the cost, instead of making you pay for it. This can vary, so it’s important to talk to your landlord and understand their rules.

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