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Renters need insurance as much as homeowners do. Unfortunately, many renters feel that because they do not own their homes that they don’t have as much to insure. If you are renting, don’t leave yourself without protection. Replacing personal items, such as a computer, bed, electronics, and even clothing, can add up quick in the event of a loss. Most people underestimate how much stuff they own. In this article, we explain in detail what tenant insurance is, what it covers and why it’s important.

What is Tenant insurance?

Renter’s insurance, also known as tenant’s insurance or apartment insurance, gives you peace of mind that your belongings are covered. Much like a homeowners’ policy, tenant insurance provides you with contents and liability coverage. The main difference is that there is more focus on the personal belongings of renters and not the building or property. In addition to contents and liability, if your unit becomes uninhabitable for any reason, you will have additional living expenses to help cover the costs of staying in a hotel. It’s important to note that your landlord’s insurance covers the building, not you.

A survey by TD insurance finds that more than half of Canadian renters do not have tenant insurance. Whether it’s due to cost, feeling as if they don’t have much to insure, or incorrectly believing they have coverage under their landlord or roommate’s policy, many Canadians are foregoing tenant insurance and, in doing so, putting themselves at financial risk. 

Did you know: Tenants are required to have a tenant insurance policy as a condition in their lease? This is common in Toronto, Ottawa and most other cities in Ontario.

What does Tenant insurance cover?

There are three types of coverage in any tenant insurance policy:

  1. Contents insurance: This protects your contents (like your TV, laptop, couch, or bed) if they’re stolen or suffer damage. It will cover the cost to repair or replace clothes and most household items.
  2. Liability insurance: This covers you if a guest injures themselves in your space and decides to take legal action against you. It also protects renters if they’re responsible for damage to other people’s property or their own.
  3. Additional living expenses: This pays for you to live elsewhere if you can’t live in your rental space due to an insured peril (e.g. flood or fire). This includes hotel bills, restaurant meals and moving costs. It is subject to certain limits.

Tenant insurance: Additions & endorsements 

You can add extra coverage to your policy for an additional premium. You can also add more contents insurance coverage for high value items. See below for examples:

  • Overland water: Water from rivers or lakes that, after a heavy rainfall, accumulates and floods out onto land.
  • Sewer backup: When sewage overflows due to heavy rainfall and backs up into your basement. Consider adding this endorsement if you live in a basement apartment.
  • Identity theft: Coverage in the event that a third party steals personal information (e.g. driver’s licence, passport, credit cards, SIN) and uses it to commit a crime.
  • Additional contents: If you have any valuables, be it a collection or a single expensive item, understand there are limits. For extra protection, you can add an insurance floater or extra rider for extensive coverage.

FYI: It’s important to have a home inventory list of your belongings. This list details all that you own and the individual worth of each item. Make sure to keep all documentation of your purchases, including receipts, photos and model numbers. 

Types of coverage offered

There are typically two types of coverage offered for tenant insurance:

  1. All risks: With All Risks, all of your contents (except those specifically excluded) are covered.
  2. Named perils: A named perils policy covers only perils that are specifically stated.

Remember, an insurer has the right to determine whether an article is to be repaired or replaced.

Factors that affect your coverage

  • How much insurance you need: If you have an Ikea futon and a 10-year-old TV, you can expect to pay less than someone who owns a leather sofa and the latest 4K TV with OLED technology.
  • The location of your dwelling: Toronto Tenants’ insurance quotes will generally cost more than those in Saskatoon because the chance of theft is higher. If you live in an area known for crime, break-ins, vandalism or stolen property, expect to pay more.
  • Property type: Whether it’s a basement apartment, a full house, or a town home – you can get renters insurance. The larger the space, the more contents it contains and the higher the risk of injury means the more your monthly premiums will cost.
  • Your claims history: If you have a history of claims, an insurance company may view you as a higher risk. Therefore, your premiums will cost more.
  • Credit score: You do not have to submit yourself to a credit check, but it can help reduce your premium. You can save as much as 25% if you have a high credit score.
  • Other risks: Running a home–based business may not factor into your premium, but it depends on the type of business. A personal chef, for instance, comes with more risk than a freelance article writer.

How much coverage do I get?

Most policies include $1 million in liability coverage in the event that someone injures themselves and sues. You can often increase your liability limit to $2 million. The average amount of contents insurance is $25,000. You also have the option to increase your limits and add additional protection.

FYI: Within your $25,000 coverage, there may be limits for specific kinds of items (e.g., up to $3,000 for jewelry). To learn more about adding an endorsement to you policy, click here.  

How much does Tenants insurance typically cost?

Premiums generally cost between $15 and $25 per month, or $180 to $300 a year. How much you’ll end up paying depends on the size of the property you’re renting, the amount of your coverage and the deductible you set. isure will help find the right balance for you by looking at your budget and what you can’t afford to lose.

What doesn’t Tenant insurance cover?

Tenant insurance does not cover all perils, and certain risks are not covered. This includes:

  • Water damage from floods
  • Sewer backup
  • Earthquakes
  • Landslide
  • Insect infestation
  • Damages by high-risk dogs
  • Car damage. It does cover the loss of stolen items from your car. However, in case the actual car is damaged, the tenant policy will not cover the losses for that.

Does renter’s insurance cover bike accidents?

If you have a home, condo, or tenant insurance policy, there’s a good chance your bike will be covered against theft and damage. However, there are some exclusions around this because a home or renters policy is intended to protect your personal property. Therefore, if your bike is damaged in a house fire or stolen out of your garage, you can make a claim through your renters insurance. Generally speaking, home insurance policies will have a sub-limit that applies to bicycles. Coverage can be from $1,000 to even $5,000 per bicycle, unless someone wishes to actually pay extra for additional coverage. Should you be a cycling enthusiast and you have an expensive bike, the sub-limit may be too low. Therefore, you can purchase additional coverage. In the same way that home and tenant insurance providers offer “endorsements” for items like jewelry, they also offer extra coverage for bicycles.

Purchasing Tenant insurance

If you are ready to apply for tenant’s insurance, make sure to keep the following personal information handy:

  • Your legal residential address
  • Your legal name, date of birth and other required personal details
  • The names of others who will stay with you in the apartment
  • The total monetary value of your belongings

Your isure representative can help you decide how much insurance you need and find you the best rates possible. Give us a call today!

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