Is having tenant insurance coverage really that important?

Tenant insurance (often referred to as renter’s insurance) helps cover the costs related to replacing or repairing the personal belongings of an individual(s) in the event of an unexpected incident occurs at a rented property. Incidents such as a fire or a flood can easily damage or ruin personal belongings. Rather than having to pay to replace or repair these items out of pocket, a tenant insurance policy would cover the cost.   

Tenant insurance usually has 3 types of insurance coverage:

– Personal property

– Liability

– Additional living expense

Personal property coverage would cover the cost to repair or replace your belongings if the unexpected were to happen. For example, if your clothing and furniture were destroyed by a fire, this coverage may help you pay for the cost to replace those items. There are usually coverage limits which means there would be a maximum amount as to how much the policy would pay for personal property losses. You might be thinking how much personal property coverage do I need? Typically it is a good idea to create an inventory of your belongings and assess a value to them. This way, you can estimate the amount of coverage that you would actually need. Some policies provide actual cash value protection and cover the belonging up to their current market value (factoring in depreciation). 

Liability coverage would cover the cost related to individual(s) who incur medical expenses from a result of an unexpected injury while at your rental property. Suppose a guest was visiting your place and they accidentally injured themselves. Having this type of coverage can help protect you in the event you are found responsible for their injuries. In addition, Liability coverage also helps cover any accidental damages incurred to someone else’s property. There are also maximum limits to which this policy would cover.

Tenant insurance usually includes coverage for additional living expense. Suppose the house in which you were renting is damaged by a flood and requires extensive repair work. The house is uninhabitable and you are forced to live elsewhere. This coverage would help pay for living expenses that you incur during the time the house is being repaired such as hotel bills or other accommodative stays. There would also be maximum coverage limits so it is always good idea to check with your insurance agent.

At Homesgate Rentals, we require that all tenants residing in our room for rent Toronto units and our short term rentals Toronto units to obtain tenant insurance. It is minimal cost relative to the benefits that it provides. You may think it is an unnecessary cost to incur due to the likelihood of such an event happening. However, the purpose of having tenant insurance is if the unexpected occurs, you will have some or full protection to help cover the costs related to the incident. If the unexpected were to occur, you will most likely be undergoing a lot of stress and worry. The last thing you want to think about is having to pay out of pocket expenses. Generally speaking, tenant insurance premiums is quite inexpensive and can cost anywhere from $15 or more each month. In any case, the benefit of having such protection far exceeds the cost.