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Insurance Bureau of Canada/nt/Home/Rental Properties/Tenant Insurance

Tenant Insurance

Understanding basic tenant insurance for contents and liability can help you rest easier. As a tenant, you may be liable for any damage you cause to your building or unintentional harm caused to others who live in or visit the property. Typically, a landlord will require tenants to have insurance as a rental condition in the lease.

Why You Need Tenant Insurance

As a tenant, you are legally responsible for any damage you cause to any part of your building and for unintentional harm caused to  others who live in or visit the property. For example:

  • If your known faulty toaster oven starts a fire that damages not only your apartment, but the entire complex, you may have to pay for the damage to your unit and the rest of the complex.
  • If someone slips and falls in your rental condo, you may be held financially responsible for the cost of the injured person's damages.

If your clothing, furniture or electronics are destroyed by fire or water damage, replacement costs add up.


Rest Easier By Knowing What's Covered

Generally, a standard or basic insurance tenants' policy covers up to $1 million for the amount you'd have to pay someone who successfully sues you. Liability coverage also pays for the cost of defending you in a lawsuit. You can often increase your liability limit to $2 million.

Additional living expense coverage pays, in certain circumstances, for any necessary expenses incurred while your apartment is being repaired. These include hotel bills, restaurant meals and moving costs. This coverage pays for unexpected expenses when you cannot live in your apartment due to a covered loss. It is subject to certain limits.

Contents insurance covers the cost to repair or replace, clothes and most household items. Even if you think your belongings have little value, the cost of replacing everything at once adds up.

So it's important to keep your home inventory up to date. Certain items are subject to limits that can reduce the amount payable. Understand the limitations and exclusions in your policy.

Replacement Cost Versus Actual Cash Value

There are typically two types of coverage offered for tenant insurance: all risks and named perils. With all risks, all of your contents (except those specifically excluded) are covered. A named perils policy covers only perils that are specifically stated.

There are typically two ways you can be indemnified, or paid under your policy:

Remember, an insurer has the right to determine whether an article is repaired or replaced.

Read your policy carefully to determine your exact coverage. Ask your insurance representative about a policy that pays for the full cost of replacing what you've lost. The alternative is a settlement based on how much your property was actually worth.

How Much Does Tenant Insurance Cost?

Cost depends on many things including:

  • how much insurance you need
  • the location of your dwelling
  • how your unit or apartment was constructed
  • your insurance company
  • Your claims history.

Shop around or talk to an insurance professional who can compare prices for you.

You can choose different levels of insurance coverage. If you want insurance for all risks versus named perils, your insurance could cost more.