What is tenant insurance and do you need it?
August 28, 2017
As a tenant, you likey have an idea of the rights and responsibilities that a tenant is legally obligated to uphold. Paying rent on time and adhering to a landlord’s rules are the most common, but what about damage? Any damage tenants cause to a property is their financial responsibility, and it can be costly! Protect your rental property, your belongings and yourself by getting tenant insurance. The right insurance plan will protect your financial future.
Damage and tenant insurance
The phrase ‘accidents happen’ rings true in any situation, but especially if you’re a tenant living in a rental property. Even though you don’t own the home or property you’re living in, you are still legally a tenant and therefore responsible for any damages that incur during your stay. This includes any damages caused to a unit or to the building, and unintentional harm caused to a person visiting the property, or someone living in the property with you.
A fire can happen at anytime, and tenants are financially responsible for any damage that occurs. Should the fire spread to other units in the building, a tenant remains responsible for the cost of damages. A flood or fire can not only cause significant damage to your unit or a building complex, but it will also cause considerable damage to clothes, electronics and furniture.
According to the Insurance Bureau of Canada (IBC), tenants are also legally and financially responsible for accidents that occur to visitors on the property, or people living within the property. If someone slips and falls in your rental apartment or property, an injured person may sue for damages. Thinking about the risks of being a tenant can be very overwhelming, which is why you need to protect yourself. Tenant insurance exists to protect yourself as a tenant if any of these accidents occurs.
What is tenant insurance?
Tenant insurance is a basic insurance policy for tenants living in any kind of rental property, including an apartment or condo. According to the IBC, a tenants’ policy can cover up to $1 million for the amount of money tenants are required to pay if they are sued for any form of damages during a lease of a rental home, apartment or condo. The insurance package also includes liability coverage to cover the cost of defence if a lawsuit happens. However, there are limitations with tenant insurance. It’s important to speak with a licensed insurance broker.
Contents insurance pays to repair or replace lost valuables in a flood or fire. These household items include clothes and furniture. Examine the cost of the goods you’ve purchased over the last several years; to replace everything you own will cost a significant amount of money if you had to.
Tenant insurance coverage
Insurance policies aren’t a one-size-fits-all, and the cost varies based on a number of factors. Where you live, your home’s structural integrity and your claims history will determine how much your policy costs.
There are different types of coverage available for tenant insurance. CirclApp recommends you speak with a licensed insurance broker to find the package that’s right for you. An insurance broker will not only be able to explain the different types of coverage, but tell you if your tenant insurance package includes liability and contents insurance.