Whether you rent an apartment, condominium, or house, imagine what would happen if suddenly everything you owned was destroyed. Your furniture, electronics, clothing, all of it gone because of a fire or flood. What would you do? Where would you go? Hold that thought for a second; forget about all your worldly possessions (including your comfy bed).
What would you do if someone visiting your place was seriously injured and sued you for damages? Or what if you were found liable for damages to your rental and your landlord sued you for compensation?
If you have a tenant or renter’s insurance policy, you needn’t worry. But if you don’t, what then?
Consider the plight of a family in St. Thomas, Ontario, who lost all their possessions last January when a fire ravaged the home they were renting. They couldn’t return to the charred house and didn’t have tenant insurance. Or think of the residents of an apartment building in Oshawa, Ontario, that was gutted by fire in March, rendering them homeless and relying on donations from the public for financial support. No one wants to be in that situation. Alas, tragedies like these are regrettably common, and they can happen to anybody at any time.
A recent RATESDOTCA online survey found 38% of respondents do not have a tenant insurance policy. Only 10% do, and of those who do have a policy, 55% voluntarily chose to purchase one and 45% did because their landlords required it. Another 30% said they don’t rent a property, and 21% chose not to answer. When the same survey asked the respondents who do not have an insurance policy why they don’t:
Those responses are concerning, but they’re not unusual. According to the Insurance Bureau of Canada, only about 50% of renters in Canada have tenant insurance.
Let’s untangle what a standard tenant insurance policy covers, and why you should get a policy if you don’t have one.
If you haven’t considered getting a tenant policy, you’re taking a tremendous risk. Who or what is backing you up if a disaster unfolds? And think about what you own. Are you sure all your possessions aren’t worth insuring? What if everything you own was destroyed? Contrary to popular belief, tenant policies are not expensive. They typically cost less than $1 a day.
Another common misperception among renters is believing that your roommate’s policy will cover you if something goes awry. It will not unless you’re listed on that policy. Are you? If you’re uncertain, find out.
Lastly, be aware your landlord’s policy protects the building or house you’re renting, but it does not cover your personal possessions, provide you with third-party liability protection, or the cost to live somewhere else temporarily if you cannot return to your home during repairs.
A standard tenant policy usually includes $1 million of liability coverage and $25,000 to cover your personal possessions. The limits on these coverages can be increased if you wish to do so.
Specifically, a tenant policy consists of three types of coverages:
But take note: a tenant policy does not cover your possessions or provide you with liability coverage if you rent your space to someone else through a service like Airbnb. By doing so, you are assuming all the risk if something goes wrong.
Also, a standard policy will not cover you for a sewer backup or damages from flooding, earthquakes, and other risks, but talk to your broker and ask about adding these optional protections to up your coverage.
If you haven’t thought about getting a tenant insurance policy before or want to get a better idea of what coverage you can get at an affordable price, do a quick comparison of policies and premiums for free. Make an informed decision, protect yourself, and get the peace of mind you need, knowing that help is only a phone call away if something goes off the rails.
The online survey was conducted from July 8, 2021, to July 17, 2021, with Google Surveys. The tenant insurance survey sample included 750 Canadians. Survey respondents indicated they were 18 years of age or older.