Do I Really Need Tenant Insurance?
The short answer is yes. There are a few really good reasons for having tenant insurance.
For one, as a tenant you are liable – yes, legally responsible – for any harm you cause to any part of your building and to others who live or visit there. Yikes! If your faulty toaster oven starts a fire that damages not only your apartment, but also the entire complex, you may have to pay out a lot of money.
You could even find yourself in trouble if your party guests get out of hand and cause damage.
Then there are your possessions. You might not think that you have much of real value, but what if you had to replace them all at once, due to fire or water damage?
Replacing your clothing, alone, could run you a few thousand dollars.
And that old couch and bed might not look like much, but buying new ones would be hard on the wallet.
When you consider what it would cost to replace everything, monthly insurance premiums may look pretty good by comparison.
One more thing you might want to think about: Talk to your insurance representative about getting an insurance policy that will pay for the full cost to replace what you’ve lost. The alternative is a settlement based on how much your old stuff was actually worth, given that it was old.
How much does tenant’s insurance cost?
The cost of tenant’s insurance depends on many things including the location of your home, how your home was constructed, and which insurance company you choose. Shop around or talk to an insurance broker who can compare the prices of different companies for you. The value of your contents also determines the cost of your tenant’s insurance. The more you own, the more coverage you will need to replace those contents. You can also choose different levels of insurance coverage. If you want to be insured for more than the basic risks, such as fire, wind and certain types of water damage, your insurance may cost more. When you compare how much you could lose if you don’t have insurance, the cost of tenant’s insurance is very small. Insurance should be part of your budget, like the cost of food and shelter.
DO I NEED TENANT’S INSURANCE? YES.
HERE ARE THREE GOOD REASONS
- TO INSURE YOUR BELONGINGS ARE THREE GOOD REASONS:
Think about all the things you own – the furniture in your bedroom and living room and all the items in your bathroom and kitchen. Think about the clothes, household items, toys, electronics and other things. Now imagine having to replace all of those items at once due to fi re or certain types of water damage. Insurance will help you rebuild your life after a loss. Insurance doesn’t just cover furniture, TVs and expensive items. Insurance will repair or replace pots, pans, clothes and most other household items. Even if you think your belongings have little value, you might be very surprised by how much it would cost you to replace everything – all at once. However, keep in mind that coverage for some insured items may be subject to exclusions or maximum limits. Read your policy carefully to determine your exact coverage.
- TO COPE WITH YOUR OTHER NEEDS AFTER A LOSS
If there was a fire in your apartment and you were forced to leave the building until the damage was
fixed, where would you stay? Without a kitchen to prepare food, could you afford to dine out
every night? Insurance covers extra costs that an insured loss may cause you. Insurance pays for any necessary expenses while your apartment is being repaired, such as hotel bills, restaurant meals and moving costs. This coverage is called additional living expenses and will pay for unexpected expenses that you have to pay because you are not living in your own home. The is coverage is subject to certain limits
- TO PROTECT YOU IN THE EVENT OF A LAWSUIT
Tenants are responsible for the harm they cause to any part of their building and to others who
live or visit there. For example, if a faulty toaster oven starts a fi re that causes damage not only to the contents of your own apartment but also to other tenants’ contents and any part of the building, you can be held responsible for the cost of that damage. Tenant’s insurance covers that cost. Similarly, if someone slips and falls in your apartment, you could be held financially responsible for the cost of the injured person’s pain, suffering and medical bills. Insurance protects you and your family in the event of a lawsuit. A standard insurance policy provides coverage, up to $1 million, for the amount that you would have to pay to someone who successfully sues you. This is called liability coverage. It will also cover the cost of defending the lawsuit. You can oft en buy extra coverage to increase your liability limit to $2 million.
How is tenant’s insurance different from homeowner’s insurance?
Homeowner’s insurance and tenant’s insurance are similar, but with one big difference. A homeowner’s insurance policy also provides insurance coverage for the house and its attachments (such as a garage or shed). Like tenant’s insurance, homeowner’s insurance includes coverage for additional living expenses, liability and personal belongings.
Insurance Bureau of Canada