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Tenant insurance is designed to specifically protect the tenant, and it offers a level of coverage that is generally not offered by a landlord’s insurance policy.
A significant number of Canadians rent apartments with 32.2% of Canadians being renters . The third of Canadians who rent will need a way to insure their property and they do this with the use of tenant insurance.
Renters insurance allows tenants to receive compensation if their property is damaged, and it will protect them from personal liability.
Renters Insurance Vs. Tenant Insurance
Many people are confused by the terms "renters insurance" and "tenant insurance". Both terms are completely interchangeable and you do not need to be concerned about the difference between the two when shopping for your insurance.
When beginning consider doing some online searches for both terms when researching tenant or renters insurance. Different information will show up depending on what terms you use, which may help you get a better answer.
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Are You Required To Have Tenant Insurance By Law?
You are not required by law to have renters insurance in Canada.
Renters insurance is not the same as car insurance where you must have coverage. However, you may be required to have renters insurance as part of your lease agreement.
Renters insurance is a good idea even if you are not required to have it as makes sense to protect your personal property. Renters who do not necessarily care about their personal property will still want tenant insurance as it will protect them from being liable for whatever reason. Also, some forms of renters insurance will pay for your living expenses if your apartment is unlivable.
What The Best Tenant Insurance Should Cover
Canada has four different types of home insurance. The Insurance Bureau of Canada requires citizens to have access to four different kinds of home including comprehensive, broad, basic and no-frills coverage.
Comprehensive insurance offers the highest level of cover out of the different types of home insurance. It covers you from all forms of common major damage ranging from interior flooding to vandalism. Comprehensive coverage will also protect you from all risks that are not specifically mentioned in your policy.
Risks not covered by comprehensive insurance are known as optional extras, and you have the option to purchase these to meet these risks. Optional extras include such things as earthquake coverage and flood coverage. You should consider the chances of these risks occurring when purchasing optional insurance features.
Comprehensive coverage will not cover what is known as “uninsurable peril”.
What is Uninsurable Peril?
Uninsurable peril covers risks that are likely to happen or risks that can be avoided. An example of this would be not being able to get flood insurance if you happen to build your home on a floodplain.
Broad coverage is the second most complete form of insurance. It covers such things as your home’s physical structure along with basic protection for the rest of the home. This form of coverage offers limited protection for the residents and property found inside of the home.
Broad coverage is a good option for people who want to insure their home, but who do not necessarily care about covering such things as their belongings.
Renters insurance should cover three important things they are your possessions, liability and living expenses. Renters insurance is relatively cheap considering the coverage it offers and can be an extremely useful asset during a difficult time.
Renters insurance should cover your personal possessions including such things as: Furniture, electronics, clothing and sentimental items.
These possessions can add up to a significant amount of money with most people having a deep level of attachment to their personal belongings. Renters insurance allows tenants to receive coverage for their personal items with the cost for personal property coverage being only a small fraction of what people generally paid for their items.
Some insurance policies have deductibles that are extremely high, which means that they are not useful. You should make sure that your deductible is low enough so that you will receive compensation after paying a reasonable amount of money out-of-pocket. Generally speaking, many customers are comfortable with a deductible that is between five hundred to a thousand dollars.
Liability may be the most important feature of a tenant insurance policy. Liability coverage will protect you from being responsible for expenses from such things as damages to the apartment, or if someone happens to be injured in the apartment.
You may end up being responsible for large sums of money and so the liability aspect of renters insurance can be extremely useful. Many people find the idea of liability vague with it being a something that will never happen to them. However, the possibility of someone getting injured in your apartment, a fire which you accidentally started or a flood from a broken fish tank are all some examples of real risks.
Renters insurance should compensate you if your apartment is declared unlivable. This will cover the cost of renting either another apartment or hotel while your apartment is being repaired. The cost of finding a new place to live can be expensive and this form of coverage can greatly help people during a difficult time. Coverage for living expenses can also cover the cost of putting your belongings into storage, hiring movers and the additional cost of commuting from your temporary housing. Generally, this aspect of renters insurance will cover the cost of finding a new permanent apartment.
What Tenant Insurance Doesn’t Cover
Tenant insurance does not cover a variety of risks and circumstances. For the most part, tenant insurance does not cover things that should be covered by your landlord’s insurance like the building’s structure.
Tenant insurance won’t cover specific things relating to your personal property including:
- Illegally Acquired Property
- Damage From Intentional Or Criminal Acts
- Damage From Flooding
- Damage From Warfare Including Terrorism
How To Reduce Your Monthly Renters Insurance
It is always a good idea to save money, and there are a number of ways to get cheap renters insurance.
Increase Your Deductible
A simple way to lower your monthly rate is to increase your deductible. Many people are comfortable with paying between five hundred and a thousand dollars out of pocket if they need to file a claim. You should make sure that you can afford this amount, and then adjust your deductible so that you find the right balance between your premiums and deductible.
Look For Discounts
Insurers seek out specific types of people to insure, and there is a good chance that you are already eligible for a discount. Insurers will give you a discount if you are a senior citizen, college graduate, or a member of certain guilds or unions. You can also get a discount if you have good credit, not filed a claim in the past several years, or if you have a home security system. It is easy to ask your insurer if they offer discounts, and you can simply inform them that you fall into one of these categories to get a discount.
A simple way to get a discount is to bundle policies. You can save money on both your auto and renters insurance by using the same insurer.
Adjust Your Level Of Coverage
The right level of coverage is a vital aspect of getting a cheap insurance rate. You should have enough coverage to insurer your belongings and protect you from liability. However, more coverage than you need is simply a waste. Taking stock of the value of your belongings is a good step towards having the right level of coverage.
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My Choice makes it easy to compare renters’ insurance, to get started just in some basic information such as where you live and your desired level of coverage. After a few more steps we will then provide you with a list of insurance quotes from all major providers in your area so you can easily compare rates.
Tenant Insurance FAQs & Tips
1. Document Your Belongings To Simplify Claims.
A good tip is to document the items in your home by taking pictures of them. These pictures will act as proof that you owned the items you claim to have. You are not required to have pictures of items before they were damaged, but it is a good way to simplify the claim process. The process of taking pictures of your possessions can only take a few minutes with it potentially able to save you a lot of money and hassle.
Another good tip is to upload the pictures to a social media site. You can set the account to private so no one will see the pictures. The social media site will serve as a digital backup, and it will put a timestamp on the photos so you can prove when they were taken.
2. What Are Average Tenant Insurance Premiums?
The average tenant insurance rate in Canada is $17 per month or $197 per year with this rate reflecting a policy with $40,000 in personal property coverage, $100,000 in liability coverage, and a deductible of $1,000.
Renters’ insurance rates are going to be very different depending upon where you live. Large cities such as Vancouver and Toronto will have high property values, and so your liability coverage will be more expensive with you generally needing higher levels of liability coverage.
Many people will want tenant insurance with a lower deductible than a thousand dollars. The lower, and more useful, deductible will result in higher insurance rates.
3. Can You Transfer Tenant Insurance Between Properties?
Yes you can. Insurance companies make it easy for you to get a new policy when you move. They will usually give you a thirty day grace period where you will receive coverage on your old residence so you can have liability coverage for the property.
You should contact your insurer before you move so you can have coverage at your new residence right when you move in. It is common to need different levels of coverage following a move and you should make sure that you have the right amount of property and liability coverage.
4. Are Pets Covered By Renters Insurance?
Pets are considered your personal property, and so they are covered by renters insurance. The major advantage of having your pet covered by tenant insurance is that it will protect you from liability if your pet hurts another person, animal, or if it damages property.