The importance of tenant insurance.
Many people mistakenly believe that tenant insurance is useless. However, even if you don’t own the building you live in, your belongings can still be damaged and you can still be liable for harm you cause. Read our advice to find out why it’s important for tenants to have insurance!
Here are some examples of the risks to which you’re exposed as a tenant:
- Structural fires
- Water damage from neighbouring units
- Insufficient landlord insurance
- Civil liability suits
For just a few dollars per month, you can avoid having to deal with any of these stressful situations and make sure you receive compensation!
1. What is the value of your personal belongings?
The first step is to calculate the value (in dollars) of all the belongings in your apartment. Many people underestimate the importance of this step when your assets consist entirely of old furniture. However, if you file a claim, the compensation you receive is based on the replacement cost of your belongings.
It’s also important to not only calculate the value of your furniture; all your possessions should be added to the list. In concrete terms, you can include the following items in the total value:
- Your clothing
- Your dishes
- Your kitchen appliances
- Your tools
- Your books
- Your shoes
When you take an inventory of your possessions, you’ll be surprised at how much you actually own!
Generally, you should calculate at least $10,000 per room and per person living in the apartment.
2. Are you insured for damage to others?
As a tenant, civil liability is another important factor to consider when it comes to insurance. Since your dwelling and other units are all under the same roof, you’re more likely to need civil liability coverage.
But what is civil liability, exactly? To put it very simply, civil liability refers to property damage or bodily injury you may cause to a third party. Here are some examples of potential risks:
- You start a cooking fire and damage the unit next door.
- Someone is injured while visiting your apartment.
- You rent a cottage and damage it by accident.
Adding civil liability coverage to your home insurance policy means you’ll be protected. Normally, we suggest a limit of $2M, since the bill for bodily injury to another person quickly adds up and the difference in premium is minimal.
3. What about water damage?
Water damage coverage is important to have if you’re a tenant, particularly if you live in a basement or semi-basement. Water can leak through the roof, your windows or even the floor. Whatever the case may be, your broker can help you choose the right coverage for your situation.
4. How do you choose the right deductible?
Like with car insurance, you have to pay a deductible every time you make a claim. Generally, the deductible on your policy is $500. If you’d like to adjust your annual premium, it’s possible to change your deductible. However, keep in mind that you’ll have to pay this amount in the event of a claim. Once again, your broker is your greatest ally when it comes to deciding which option is best for you.
There’s always a deductible to pay when you make a claim, you can choose your deductible, and the standard deductible is $500. This means that you pay the first $500 and the insurer takes care of the rest.
5. Have you considered other expenses?
In the event of a claim, the insurer may reimburse you for other expenses. This is what’s known as additional living expenses. This coverage is generally equal to 20% of the total insurance amount. In other words, if you have $50,000 in property insurance, you are covered up to $10,000 for losses that require a temporary relocation:
- Hotel accommodation expenses
- Restaurant meal expenses
In short, tenant insurance should not be overlooked. Even if your building doesn’t belong to you, you still have plenty of valuable items in your apartment. If something happens, you will definitely want to replace them! For any questions, don’t hesitate to contact our team of brokers. It will be our pleasure to assist you!