It is not uncommon for renters to ignore tenant’s insurance. They believe that they are only putting themselves at risk by doing this. Also, they make some assumptions that are incorrect. At least if one learns more about this type of insurance the decisions they make will be informed ones.

Why Do You Need Tenant Insurance?

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Quite often those that rent do not put enough value on their belongings. They feel because they do not own real estate there is no need to insure their items. It is easier to understand the importance of this if one learns what tenant insurance has to offer.

What Does Tenant’s Insurance Offer?

Think about all the potential mishaps that could take place with your personal belongings. Then you will be on the right path about thinking about tenant’s insurance.

Fire:

Fire is a common occurrence. One that can take place among homeowners as well as renters. It is one of those situations where many people think “it can’t happen to me”. A wake-up call is to look at some of the statistics.

According to the OFMEM there were 54,457 fires with losses reported. These took place between 2012 to 2016. Out of this 49 % of them occurred in residential dwellings.  This accounts for 73% of structure loss. What is even more alarming is what was the cause of these fires. All are sources which can be found in tenant living. Some of the more common ones are;

  • Cooking – 18%
  • Cigarettes – 7%
  • Appliances – 4%
  • Candles – 2%

Acts of Nature:

Another area that tenant insurance will cover is as the result of certain acts of nature. In Ontario, the weather can vary dramatically. There are a lot of environmental changes that are taking place. To the extent where even big cities like Toronto are more subject to inclement and potentially dangerous weather. Strong storms can cause damage to tenant’s belongings in a variety of different ways. With the most common being wind storms or hail that can break windows.

Floods:

For those that don’t think Ontario, for example, is experiencing weather changes the news release by TVO may change their minds.

In this article titled “There Will Be Floods – and Ontario’s Not Ready for Them” speaks clearly of the concerns for change in weather conditions. Paulin Coulibaly a scientific director of FloodNet  indicated,

“the storms we’re facing are unlike anything that’s come before in terms of intensity and duration.: source. tvo.org.

These are not storms that are just going to have an effect on homeowners. But will possibly include flooding issues that will have an effect on tenants that are renting various types of residences.

Theft:

Another important segment of tenant’s insurance is the insuring of belongings against theft. Break and Enter is probably one of the common types of events that a lot of people feel won’t happen to them. The latest statistics for this show that so far in 2018 there have been 2,184 break-ins and we are only halfway through the year. Also, these are just the Toronto Police Service statistics for Toronto.

It may seem that tenant’s insurance only covers a few things but what they do cover is critically important. No matter how many personal possessions a tenant may have. It is estimated by some insurance companies that the average individual has about $35,000. worth of belongings. All of which could be destroyed by fire, acts of nature or theft.

theft

Not Taking Landlord Insurance For Granted

Some tenants assume that the landlord has insurance and this is going to cover the tenant as well.  Landlords will have insurance, but it will provide coverage for the structural components of the dwellings they are renting. It does not cover the contents of these dwellings. This is where the need for tenant’s insurance arises. Which will cover the contents but not the building structure.

Beyond the Belongings – Tenant Insurance Coverage for  Liability Claims

Another responsibility that tenants have is keeping anyone that comes on the property safe. For example, if one of the kids left their bike on the front steps and a visitor tripped over it. There could be injuries to the person, and you are responsible for their medical costs.

Or, if a fire broke out in your apartment which you were the cause of. There could be structural damage to your apartment as well as those adjacent to you. Then your tenant’s insurance is likely going to protect you from this.

This part of the tenant policy is one of the most important ones. It demands a substantial amount of coverage of a least $1. Million in coverage.

The Extras

Tenant’s insurance also has some additional benefits to it, provided one by a full coverage type of tenant’s insurance package. Such as;

  • Your tenant insurance should cover belongings that are not personally yours if they are in your possession.
  • If some of your belongings are being temporarily kept in another location, they may be covered
  • Anything that becomes damaged or stolen that is in your vehicle is most likely going to be covered.

When a mishap occurs that is covered under your tenant insurance; it may make it impossible for you to live in your dwellings. Tenant insurance can help with additional living expenses.

There is some voluntary coverage available. This means there may be coverage available for medical expenses or property damage. If the mishap causing the need for these took place on your property. Even though you may not be legally responsible for this.

For those that want additional coverage in many different areas of their tenant insurance, there may be policy extension options.

property damage

Is Tenants Insurance Mandatory?

Tenant insurance is not mandatory in Ontario. Landlords can lease their property to tenants even if they don’t have content insurance.

Can a Landlord Require Tenant Insurance?

Yes, a landlord can require proof of tenant insurance. It should be part of the lease that this is a requirement. This is why it is so important that tenants read their leases carefully.

Resources

https://www.mcscs.jus.gov.on.ca/english/FireMarshal/MediaRelationsandResources/FireStatistics/OntarioFires/FireLossesCausesTrendsIssues/stats_causes.html
https://app.powerbi.com/view
https://www.statefarm.ca/insurance/home-and-property/renters/coverage-options
https://www.rbcinsurance.com/home-insurance/tenant-insurance.html
https://www.thestar.com/life/homes/2011/08/16/do_renters_need_insurance.html