One of the most under-utilized insurance products on the market is Tenant Insurance. As a tenant, you may be liable for any damage you cause to your building or unintentional harm caused to others who live in or visit the property. Typically, a landlord will require tenants to have insurance as a rental condition in the lease.
Statistics indicate that only about 40% of renters purchase insurance vs 95% of homeowners, yet it seems regularly there is a news story highlighting a building fire and occupants standing on the street shivering, stating they do not have insurance. The risk is real and with more people working from home, the risks have become greater.
According to a Statista Research Developments survey done in 2018, the main reasons a tenant does not buy insurance are:
- They think it is cost prohibitive.
- They think the landlord’s insurance covers them.
- They did not think they own enough in value to insure.
How much does Tenant Insurance cost?
Tenants insurance is very reasonably priced. if you break it down, it can be as low as about $1 a day. The cost is dependent a variety of factors:
- the value of your contents
- the location of your dwelling
- how your unit or apartment was constructed
- your insurance company
- your claims history
Why you need Tenant Insurance?
Your landlord’s policy will cover their building, any damage to the building and the exposure of having you as a tenant, but it will not cover your belongings, your liability exposure or defend you in the event of a lawsuit; that is what your coverage is for. You are legally responsible for any damage you cause to any part of your building and for unintentional harm caused to others who live in or visit the property.
Some examples of claims made under a tenant insurance policy:
- If your known faulty toaster oven starts a fire that damages not only your apartment, but the entire complex, you may have to pay for the damage to your unit and the rest of the complex.
- If someone slips and falls in your rental condo, you may be held financially responsible for the cost of the injured person’s damages.
- If your clothing, furniture or electronics are destroyed by fire or water damage, replacement costs add up.
Your contents are worth more than you think
Tenants Insurance covers the cost to repair or replace what is yours in your unit: clothes, household items, electronics, furniture, and computers onsite in your unit, with some extensions for goods offsite.
Even if you think your belongings have little value, the cost of replacing everything at once adds up. Most Tenant Insurance policies pay out on a replacement cost basis, which generally means new items replace old used items.
Insurance is there to get you back on your feet. Even if you had your grandmother’s old couch, your coverage will afford you a new couch. Don’t underestimate your closet and the cost of all that is in those cupboards and drawers. Most insurance companies have a minimum content amount of around $30,000, but you would be surprised how quickly things add up in the event of a total loss. It is important that your coverage limit reflects the cost of replacing your items new. The specifics of contents coverage and any extensions, limitations or exclusions are important to note, so check with our agents about the best fit for your circumstance.
Additional Living Expense Coverage pays for any necessary expenses incurred while your apartment is being repaired. These include hotel bills, restaurant meals and moving costs. This coverage pays for unexpected expenses when you cannot live in your apartment due to a covered loss and is subject to certain limits.
Liability is standard on a basic insurance tenant policy, and covers up to $1 million for the amount you would have to pay someone who successfully sues you. Liability coverage also pays for the cost of defending you in a lawsuit. You can often increase your liability limit to $2 million.
Tenant Insurance is affordable and more importantly necessary to ensure you have the peace of mind that you have done what you can to ensure you won’t be left desperate if the worst should happen.
Whether you are in our neighbourhood of Coquitlam, the Tri-Cities area, the Lower Mainland or Fraser Valley, let MacDonald-Gill Insurance Services help you choose the best Tenant Insurance Policy for you.