Why Renters Need Tenant Insurance

In 2021, the number of renter households grew faster than owner households, according to Statistics Canada, and in cities like Québec City and Halifax, more than 60 per cent of new dwellings built since 2016 are rentals. Yet many tenants aren’t aware that if there’s an unexpected situation like a flood or fire, the landlord’s insurance won’t cover the loss of their personal belongings — and those items can add up quickly. Insuring yourself and your belongings now could help you get back on your feet if you need to make a claim.

What is tenant insurance?

Like other types of home insurance, tenant insurance offers protection for damage or loss to your personal property at your rental home. In some cases, it can also cover your personal property when it is away from your premises. For example, if your laptop is stolen from your car.  

Tenant insurance may also help cover costs, like moving expenses if you need to leave your rental property so repairs can be made after a covered claim for fire or water damage. Liability claims may also be covered if you accidentally damage someone else’s property, like a neighbouring unit or home. Plus, no matter where you are, liability claims may be covered if you accidentally cause physical injury to someone else. For example, while you’re on vacation out of the country, you throw a baseball and accidentally knock out a bystander’s tooth.

What does tenant insurance cover?

Tenant insurance, sometimes called renter’s insurance, generally covers two things: Personal belongings and liabilities. You can also purchase special coverage for things like business equipment kept at home, bicycles or jewelry.

Personal belongings

This is what you own, like your clothes, furniture, and electronics. You may be surprised by how much it would cost to replace your stuff. Try walking around your home and estimating what it would cost to buy everything new again — from your shoes to your toothbrush to your bed. It can add up quickly!

Liability

Tenant legal liability coverage can help protect you from accidentally injuring another person or damaging someone else’s property. For example, if you have a guest over and they slip and fall, or if your microwave catches fire and your neighbour’s unit has smoke damage.

Additional living expenses

Tenant insurance may also help cover costs, like hotels or food if you need to leave your rental property so repairs can be made after a covered claim.

Do all renters need tenant insurance?

Renters are legally responsible for damages to the rental properties they live in, any unintentional injuries to the people in them and accidental damage to other properties. Anyone renting a property can have tenant insurance, but it isn’t mandatory in Canada. However, many landlords ask for proof of it as part of the rental agreement.

While your landlord’s house or property insurance may cover damages to the structure of the home itself or any appliances the landlord owns, it won’t cover damage to items that belong to you. It also doesn’t cover you from situations where you could be personally liable, like if you accidentally cause a flood that damages a neighbour’s unit.

How does tenant insurance protect my personal belongings?

Tenant insurance covers items ranging from clothes and computers to appliances and books as long as you own them. For example, if a pipe burst and ruined your furniture and belongings in your basement apartment, your renter’s insurance could help you replace those items. Or if your storage locker in your building is broken into and items stolen, having tenant insurance could also help replace your losses.

Consider getting enough coverage so you can repurchase everything new if needed. Keep an itemized list of what’s inside your home, take photos and videos of your belongings and record serial numbers. Store your list somewhere safe outside of your home, like a safety deposit box or a secured document online. This way, you can access it if you can’t get into your home. Update your list on a regular basis, especially when you buy something valuable, and consider whether you need to increase your coverage.

What is liability coverage?

This is the amount of money you are covered for if someone (or their insurance company) sues you for damages. For example, if you have coverage for $2 million, your policy covers your legal liability up to that amount. For this reason, many renters buy policies with as much liability coverage as they can afford.

How much does tenant insurance cost?

Compared to home insurance, tenant insurance is usually more affordable because it does not cover the replacement costs of the house itself, but it covers:

• Your personal property and belongings, like clothing and furniture

• Liability if someone is injured in your home, like if they slip and fall on your steps

• Liability coverage for repairs and damages where you’re at fault

• Legal defence costs if someone sues you for damages to their property

Some insurance companies, like RBC Insurance, offer discounts for bundling your tenant insurance with other policies, like car insurance. It’s an option to explore if you need both types of policies.

Getting tenant’s insurance now could spare you from spending thousands of dollars later to replace items, repair damages, or deal with costly lawsuits from landlords or other individuals.

A licensed insurance advisor can help you get a tenant insurance quote and find the right coverage for your situation.