Renters' insurance, or ‘tenant insurance’, is important for any person renting a property or unit. Even if your landlord already has their own policy in place, by having your own policy you will have coverage for additional protections such as content in transit, additional living expenses, and you may be able to purchase additional protection for identity theft and cyber security (and more). Be sure to discuss all of the coverage options with your insurance representative.
Why renters' insurance is important
It’s a common assumption that because landlords already have insurance for the property, renters don’t need to have their own, but you shouldn’t underestimate the importance of renters' insurance. Your landlord’s insurance will generally only protect the property as a whole and not your personal belongings.
Anything that occurs in your own unit will be your responsibility, which means that if something unfortunate happens within your rented property - whether something is stolen, or someone gets into an accident - you won’t be protected by your landlord’s insurance. Instead, you could be held liable for any damages, which could mean having to pay out of pocket for expenses like repairs.
What renters' insurance covers
Renters' insurance in Canada generally includes coverage for personal property (including contents in transit), personal liability, and additional living expenses. That said, you can purchase extra coverages or additional safeguards to bulk up your policy and ensure that you have a safety net for any circumstance.
Here’s a look into what is typically covered under tenant insurance:
Personal property
Renters' insurance provides coverage for loss or damage to personal possessions –including clothing, kitchenware, furniture, home accents, and more – when caused by fire, smoke, vandalism, building collapse, etc. Depending on your policy, coverage may extend to other events such as water damage or earthquakes (though these are usually added on). If you have more valuable belongings, such as jewelry or artwork, you’ll also usually have to buy a policy to extend protection to these expensive items.
Renters' content insurance may also include coverage for belongings in transit when you move your things. So, if your items are damaged while moving from your old home to your new rented property, you’ll have safeguards in place.
Personal liability
Personal liability coverage protects you in the event that someone visiting your home is unintentionally injured or you have damaged someone else’s property and now have to pay for damages. Note: If you cause damage to the rental unit this may not be covered. Be sure to ask your insurance representative about the right coverage for your situation.
Additional living expenses
If you file a claim with your insurance provider for damages in your rented property and due to the extent of the damages it is determined that you to have to move to a temporary space while it’s being taken care of, you may have any additional living expenses you incur covered, such as hotel bills, storage fees etc.
What’s not covered under renters' insurance
Renters' insurance has some limitations, even with its usual inclusions. For example, coverage is often not given for loss or damages caused by certain types of incidents like earthquakes, floods, sinkholes, and sewage backups. Physical damage to the property structure and pest infestations are also usually excluded, though they may be covered by your landlord’s insurance (if they purchased additional coverage). Be sure to check with your insurance representative as some of these may be available to add on.
You also don’t usually get coverage for vehicular damage on cars parked within the rental property’s premises (but these may be included in an auto insurance policy). Your roommate’s belongings are also not covered by your renters' insurance; they’ll have to get their own policy to protect their items.
Stay protected: Find out what your renters' insurance policy covers
Renters' insurance plans differ, and it’s important to know what’s included with your policy before you sign your contract. You may want to purchase extra coverage to ensure you cover all your bases. One of the best add-ons you can include is coverage for identity theft and cyber security, especially if you’re dealing with technology at home or if you work remotely.
Check with your insurance representative about available plans and learn about what’s covered, what’s not, and what you can add on to build a renters' insurance policy that works for you.