Statistics show that less than 50 percent of all renters across Canada have renter’s insurance. Many tenants don’t feel the need to have it, as they believe that their personal belongings are not worth anything. Others may feel that they live in a safe neighbourhood or safe apartment building, so the need for insurance in not necessary, as break-ins rarely happen. But what these tenants fail to realise is that if the property that they rent is damaged due to their negligence they could be responsible for paying the cost of the repairs.
If you accidently leave a candle burning or a tap running, and it causes a fire or a flood, you would be responsible for any damages this would cause. If you don’t have insurance, these expenses would be your sole responsibility. It also means that if other units are damaged you will have to pay for these repairs as well. Plus, if another tenant in the building is in some way inconvenienced by this damage, you would also be responsible for any expenses that they incur. If pipes, appliances or the actual structure of the building fail, these things are the responsibility of the landlord. But basically, if something happens as a result of an accident caused by you or anyone that may be visited you, this is your responsibility.
Another thing to consider is unintentional injuries. For example, say a friend or relative is visiting and slips and falls, resulting in a broken bone. If this injury means that they can’t work, then you are responsible for their loss of income and any other expenses that they incur as a result of the injury. There is also the risk of you losing your personal belongings, be it through a fire, flood or robbery. If you don’t have renter’s insurance then you basically lose everything. If you do, your policy will cover the cost of replacing what you lost.
Another issue that could happen is that you yourself may have to leave the premises as a result of being forced to leave due to repairs after a fire, flood or some sort of structural damage. In these cases you will have to perhaps stay at a hotel and eat in restaurants, which can become quite costly. Renter’s insurance will cover these expenses and any other additional living expenses that are needed. A few other things that many tenants don’t think about are simple things like loss of food if a fridge or freezer breaks down, the replacement of a lock if keys are stolen or fire department charges. All of these things are covered under any renter’s insurance policy.
A requirement from most landlords
There is also the fact that many landlords actually insist that you have renter’s insurance and even state it in your lease. This is almost always the case with large property management companies, as it is a way to insure that other tenants are covered in case you cause an accident that damages the property and possessions of others. It also insures that tenants in the building are of a certain character, because if you can’t afford the cost of tenant insurance then they may decide you are not fit to live there. In fact, you can actually be evicted if you don’t have renter’s insurance and it is a condition on the lease.
How much will insurance cost?
So do you need renter’s insurance? Well this is entirely up to you. If you can afford the cost of replacing your personal belongings, repairs that an accident may cause or any other additional costs incurred by not having it then I guess not. But if you can’t, having renter’s insurance is a very good idea. Yes, hypothetically these things stated above don’t happen often. But they could, and could end up being extremely costly. Many people don’t have upwards of $10,000 laying around in case something happens, so the amount it costs to insure your living space is well worth the expense.
Basic renter’s insurance on a 2-bedroom apartment can cost as little as $15 per month or $180 per year. This can go up if you have expensive jewelry, sports equipment or electronics, but if you don’t have luxury items this is not a lot of money to pay for some peace of mind. On average, tenant insurance is roughly $300 dollars a year. The rates go down if you also insure your car with the same company.
In the end…
To sum it all up, renter’s insurance covers many things. It covers your personal property, like audio and visual equipment, clothing, furniture and jewellery, in case of a fire, flood, robbery or some other incident. It also covers the personal property of anyone else living in the unit. It also covers any damage done to the dwelling that has been caused by theft or attempted theft.
Renter’s insurance also covers additional living expenses, as mentioned above. This includes hotels or rent paid if you have to leave your premises. It also includes the loss of food. Plus, sometimes after being evacuated from your dwelling it then needs to be cleaned from the damage. This too is covered under tenant insurance. Then there is liability. This means any damages to the property that you cause through an accident. Your personal belongings and the premises are covered as a result of this, as are any medical expenses that are incurred.
At the end of the day, having renter’s insurance is well worth the small monthly or yearly fee, as not having it can end up costing a lot more. Like any type of insurance, there are plenty of companies that offer tenant insurance, so take the time to shop around. A good place to start is with your financial institution or with the company where you have other insurance policies, like for your car, truck or motorcycle. Many companies have bundle insurance, which combines your tenant and auto insurance. This will reduce your premiums on both policies.