What exactly is tenant insurance and why do I need it?

Apr 21 2021, 12:53 pm

If you’ve thought about getting tenant insurance but haven’t bitten the bullet yet because you’re still not exactly sure what the benefits are —  or if it’s even worth it — don’t worry, you’re not alone.

Insurance isn’t always the most exciting of topics to learn about, but as a renter, when it comes to tenant insurance, having it and knowing everything that it covers can be a real asset down the line.

Aviva Canada‘s VP Personal Insurance Underwriting Policy Sonja Denobrega broke down everything a renter needs to know when it comes to understanding just how much protection and peace of mind a tenant insurance policy can offer you.

“It covers everything from your cellphone to a computer, down to the last fork in your drawer,” Denobrega told Daily Hive. “When you put all those things together, people tend not to realize how much they stand to lose if disaster strikes.”

So if you’re renting your home and are looking to get yourself some insurance, here’s everything you need to know.

What does tenant insurance cover?

All tenant insurance plans cover three big areas: your personal property, liability, and additional living expenses.

So if your belongings get stolen, lost in a fire, or what have you, the insurance company will pay to have them replaced. And if something has happened where your home has become unliveable, the insurance policy will cover those additional living expenses as well.

“If there is a claim and you are forced to have to live somewhere else because your home is now untenantable or the repairs are being carried out, then it affords you coverage to live somewhere else so you can continue on with life until you get your apartment back,” Denobrega said.

The liability coverage protects you in case someone comes to your home, injures themselves due to your negligence, and then sues you.

“If you have a visitor in your home, for example, and you leave something on the stairs and they trip and fall and injure themselves, that’s a situation where it’s going to be your negligence or your responsibility and [the insurance] would kick in,” Deneobrega said.

“Even if it were fraudulent or without merit, you’d still have to go to court and defend yourself legally and those are all things that are all covered by a tenant’s package policy.”

What does tenant insurance not cover?

Insurance plans will typically cover all of your belongings, but there are certain monetary limits on more expensive items — usually only going up to a few thousand dollars depending on the plan — so the full price of things like jewellery or high-end bicycles may not be covered.

“Those are two common things that people maybe don’t know are limited, so there is coverage but there is a limit to it,” Denobrega said. “And then there’s other things like collectibles, so sports cards or memorabilia that are high value.”

Insurance companies typically offer separate coverage for those big-ticket items that you can purchase additionally in case their value exceeds your policy’s limit.

Does it cover me when I travel?

Yes! Tenant insurance doesn’t solely cover your belongings while they’re inside the home you’re renting — it travels with you anywhere you go.

“Liability and personal property coverage, that covers you anywhere in the world,” Denobreaga said. “So when you travel — when we get to do that again — your personal property that you travel with is covered under your policy.”

And the liability coverage goes with you too.

“If you’re sued because something happened in another province or what have you, that travels with you as well,” Denobrega said.

How do I know what plan to choose?

The first thing you’re going to want to do before choosing a plan is to take stock of everything you own so that you know what dollar amount you think would cover all your belongings. That way you can choose a plan that covers up to that amount.

Most insurance companies’ most basic plans tend to have a minimum $20,000-$30,000 of coverage, but you can increase that number based on your needs.

“Look around and say what would it cost me to go out right now and re-buy everything I own from a pair of socks to my bed to computer equipment and that’s a really good way [to know],” Denobrega said. “You’ll find, I think in most cases, you’ll get to that $20,000 a lot faster than you think that you’d would.”

“The other thing to consider is that you might have a laptop, TV, or bed that’s five to 15 years old, but typically it’s not replaced with something that’s five, 10, or 15 years old. We’re talking today’s prices. So consider what it would cost today to replace everything.”

Once you’ve figured out how much coverage you’ll need and are trying to decide what company to go with, Denobrega suggests asking for quotes from several different insurers to compare prices, coverage, and deductibles.

“Make sure you’re looking at price, their customer service, the ease of communication, and ease of getting quotes,” Denobrega said. “It should be really, really easy to do. It should not be a long and arduous process.”

How much will it cost?

Prices typically start around $20 to $25 per month on the low end but vary from plan to plan.

But if you’re looking to get a good deal, you can look into bundling it with another insurance plan that you may already have, such as auto insurance. Also, make sure you check to see if any of the insurers offer deals to any associations you’re a part of.

“A lot of universities and professional organizations do offer group coverages so that’s something to look out for as well,” Denobrega said.

Laura HanrahanLaura Hanrahan

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