Why do I need tenant’s insurance?

April 29th, 2015

If you’re renting a house, apartment, condo or maybe even just a room, you may want to consider getting tenants insurance coverage. Depending on your lifestyle and what you’ve accumulated, you may not think there is value in such coverage. And maybe you don’t own a lot of expensive stuff, but imagine having to replace your furniture, computer and clothes all in one shot?

But here are a few other things to consider: 

  • Your landlords insurance does not cover your personal belongings such as furniture, electronics, jewellery and sports equipment etc., in the event that they’re lost or damaged in a fire, theft or water damage
  • If you cause damage to your landlords property (whether accidentally or not) you’re responsible to cover the cost to correct it. For example: you have a party in your apartment, too many people show up and your toilet overflows causing damage to the unit below. You could be held financially responsible for the costs to fix any damages arising out of that situation.
  • Also, if you are on the lease you could be held legally responsible, even if a guest to your rental home causes the damage.
  • Tenant insurance protects you from the cost of damage you may accidentally cause others. For example: you’re throwing another soiree in your rental and a guest trips on a floor mat, even though it was accidental your guest can potentially sue you for damages.
  • The cost to replace damaged items can far exceed the cost of tenant insurance. Consider this: the average policy is as little as $15/month in Alberta yet the cost to replace the goods in an average one bedroom apartment is over $20,000!
  • If you have auto insurance, you may qualify for multi-policy discounts which could make your tenants policy effectively free (ask your broker!)

There are two basic areas that tenant insurance covers:

  • liability (protects tenants if they or their guest(s) damage the landlords property)
  • content coverage (refers to the replacement/repair of lost or damaged belongings)

If you’re considering tenants insurance, here are some features to discuss with your broker:

  • liability coverage
  • additional living expenses
  • replacement cost
  • theft/vandalism
  • deductibles
  • scheduled articles coverage (e.g.: jewellery)

As always – before signing on the dotted line, have your insurance broker review the entire policy. If there are any sections that you are unclear or cause confusion, you’re your broker to explain it again. It’s important to ask questions when you don’t understand (sometimes insurance professionals get caught up in the gobbledygook and forget that not everyone knows insurance!)

At a reasonably low cost, tenants insurance can not only offer you protection but also peace-of-mind.

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