4 reasons you need tenant insurance

You hear about it all the time—uninsured tenants or homeowners who lost everything in a fire. They find themselves without furniture, appliances, electronics, clothes, books, CDs, computers... Think about everything you own—-could you afford to replace it all?

If you don’t have insurance and:

Your property is damaged by another tenant:

  • You’d have to take steps to get compensation by yourself. And if the case ends up in court, you’d need to hire a lawyer.

You cause the damage:

  • You’d have to handle compensation claims for damages to the building and other tenants’ property.

With tenant insurance:

  • You’re quickly compensated for lost or damaged property
  • Your insurer handles compensation claims if:
    • you accidentally damage someone else’s property
    • or
    • your property is damaged

Because apartments are so close together, there’s a bigger risk of an accident impacting your neighbours.

Tenant insurance always includes liability coverage, which protects you in the event of accidental damage affecting others.

Most people opt for $2 million in liability insurance. But you can ask to have it increased to up to $5 million.

Examples of when you need liability coverage

Aside from the obvious risks of kitchen fires, smoking and water damage, you could also be held liable if:

  • you forget to blow out a candle, the drapes catch fire and the blaze spreads to the rest of the building
  • while doing volunteer work, you accidentally spill paint on the carpet
  • one of your children hits a baseball and smashes a neighbour’s window
  • your dog scratches the paintwork of a parked car
  • at the airport, you accidentally bump into an old lady, who falls and breaks her hip

Other consequences of not being insured

A liability lawsuit can put your financial future at risk.

  • On top of the amount claimed, you’ll need to hire a lawyer to defend you in court.
  • If you’re found liable, the ruling is legally binding for 10 years. That means that as soon as your financial situation improves (e.g., you get a job after university), you can be asked to pay up, even 10 years later.

With tenant insurance:

  • You get liability coverage of at least $1 million. This amount can be increased to up to $5 million.

After a loss, like a fire or major water damage, you’ll need to find somewhere to stay during renovations, and that could easily be for weeks. With no insurance, you’d have to rely on family or friends to put you up.

With tenant insurance:

  • After a covered loss, you get money for additional living expenses to cover the extra cost of accommodation and food.

If you don’t own much, you can get all-risk tenant insurance for less than $20 a month.

Ways you can save even more:

  • Increase your deductible.
  • Theft is included in all basic tenant insurance. But if you don’t think you have anything worth stealing, you can exclude theft to reduce your premium.
  • Buy your home and car insurance from the same company.

Features of all-risk tenant insurance

  • Provides essential basic coverage, including for fire, theft, vandalism, falling objects and certain types of water damage.
  • Covers most accidental damage—things you don’t normally think about when buying insurance.
  • Excludes some risks, such as wear and tear, rust or corrosion, mechanical breakdown and floods.