If you are a renter, you must protect your belongings in case of theft or damage. The answer is simple: secure tenant insurance. But unfortunately, many Canadians are answering differently. Renting without tenant insurance is more common than you think. Let’s examine what tenant insurance is, what coverage it provides, and how much it will typically cost.
Over 50% of Renters Don’t Have Tenant Insurance
As of 2024, specific data on the percentage of Canadian renters without tenant insurance is limited. However, a 2021 survey by TD Insurance found that 41% of Canadian renters did not have tenant insurance, and 51% of respondents reported they would have trouble replacing their belongings without it. Only about 20% stated they could replace all or most of their personal property without the help of a tenant insurance policy.
Additionally, a study indicates that more than half of Canadian renters (53%) lacked tenant insurance. Common reasons renters forgo tenant insurance include:
- Belief that the landlord’s insurance covers their personal belongings
- Perception that they don’t own valuable items worth insuring
- Concerns about the cost of insurance premiums
Tenant Insurance: Breakdown
Tenant insurance (also known as renter’s insurance) is a form of coverage that protects tenants and their belongings. It’s similar to home insurance, but since you aren’t the property owner, tenant insurance doesn’t cover the building or house. Renting without tenant insurance may seem like a smart cost-cutting measure, however not having it may cost more than you can afford to lose.
What it covers:
Tenant insurance typically provides coverage for your belongings against common risks such as theft, fire, and water damage. The coverage applies to your belongings in your home and those you bring with you to the gym or on vacation, for example. Despite these concerns, tenant insurance is relatively affordable. The average annual premiums in Ontario were roughly $206 in 2023, up from $187 in 2022. Even though tenant insurance is one of the most cost-friendly coverages available, many renters will pay between $20 and $30. This will, in turn, translate to an annual expense of $250 to $360.
Replacement Costs:
The replacement cost of an average two-bedroom apartment is about $50,940, excluding tax. Which prompts the question of whether or not most renters are fully covered in the event of an emergency. That’s why renting without tenant insurance can prove to be too high a cost.
Loss of Use Coverage:
Beyond the cost of replacement, tenant insurance serves as a crucial stop-gap solution if you find yourself forced out of your home. Loss-of-use coverage will cover additional living expenses. When situations arise that can affect multi-unit buildings, such as a power vault fire, the entire building may no longer be inhabitable for an extended period of time. Tenant insurance also provides coverage for any additional living expenses (e.g., hotel and food) until you can move back in or find somewhere else to live.
Third Party Liability:
Liability coverage protects you from unintentional property damage or bodily harm, and you’re legally responsible for paying the damages. So, if someone becomes injured or damage to their belongings is incurred, liability coverage has you covered.
In the event of a fire, landlords are not responsible for making sure that tenants have alternate living arrangements, meaning the tenants are responsible for hotel and transportation costs.
“Protecting personal property that often can be expensive to repair or replace makes sense for homeowners and renters alike,” Craig Richardson, VP of claims with TD Insurance, says in a news release. “Insuring a home isn’t just for homeowners. It’s a savvy way for renters to protect their valued belongings and help cover potentially expensive replacement or repair costs when an accidental or unexpected loss happens.”
Final thoughts
For many people, one of the biggest benefits of renting is not having to be deal with any misfortune that occurs to your place of residence. If a pipe bursts in your bathroom or your laundry machine goes on the fritz, while it may be an inconvenience, it’s not really your problem. You don’t have to deal with it. All you have to do is call your landlord. But in the case of larger scale damages, from say a ceiling collapse, your landlord might be able to get the ceiling fixed, but from the unwearable clothes to the nights you’ll spend in a hotel while your room will all be your responsibility to deal with and pay for. That’s why renting without tenant insurance can come at too high a cost.
Speak with one of our isure representatives to ensure that you secure adequate tenant coverage and peace of mind.
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