Finding a new apartment can be a very exciting and busy time. Between moving, buying new furniture, decorating, and unpacking, there is a lot to handle! It can certainly be stressful and overwhelming at times. However, one thing that is critical to think about and not forget before moving into your new place? Tenant insurance. This complete guide covers what it is, what it costs, and how to get it.
What is tenant insurance?
Tenant insurance protects both you and your belongings if you rent instead of own. If you unintentionally damage the apartment you rent, tenant insurance can save you from having to pay for everything out of pocket.
Tenant insurance will also protect the items in your home or apartment from things like theft, vandalism, and other damage.
What does tenant insurance cover?
The answer? It’s actually quite broad. It could be your clothing, your furniture, your jewelry, your technology, and many others.
Because of this, it’s often called contents insurance. It is important to be aware that all contents might not be covered. There can be limits in some cases. Also, some policies may cover all of your contents (‘all risks’), while others may only pay you for things you specifically have named (‘named perils’).
Tenant insurance can also protect you if someone injures themselves in your rented space. Of course, always confirm your coverage! Be aware of your limits and liability before signing or agreeing to anything. Many policies will cover up to $1 million, but this can also be raised if you see fit or would like more coverage.
If you need to vacate your rented apartment due to repairs of any kind, tenant insurance might also cover additional living expenses you may incur when away from the space. This includes your meals, the costs of moving, and your accommodations. This won’t cover all of your expenses, simply the additional expenses you have over the amount you will generally pay in a given month.
The cost of tenant insurance is typically between $15 and $50 a month. It’s a cost-effective way to give you peace of mind when living in a rented space.
Related reading – Types of Insurance: A Complete Guide For Canadians
Is tenant insurance mandatory in Canada?
While having this type of insurance is highly recommended in most cases, tenant insurance isn’t actually mandatory in Canada. In many areas, you will be able to rent freely without having to prove that you have tenant insurance. However, be aware that some buildings might have an apartment insurance policy of some kind that asks you to have tenant insurance if you want to rent there.
Many landlords will indeed have their own insurance coverage. This, however, usually only covers what they own such as the walls, the roof, the appliances they have provided, etc. Every landlord does things differently, so be sure to confirm any coverage.
Despite the fact it isn’t mandatory, it’s almost always a good choice for renters to protect themselves. If you don’t have tenant insurance, and someone is seriously injured in your home or an accidental fire destroys the apartment/your belongings, you would be on the hook for it all. Even if you don’t think you own a lot, paying to replace it all will likely show you that you had more than you thought.
How much does tenant insurance cost?
As mentioned above, the average cost of renters insurance is around $15 to $50 a month. However, a lot goes into deciding just how much you end up paying each month.
The location of your home is one factor. Some cities simply have much higher insurance costs than others. Sometimes, costs can even differ between neighbourhoods.
Another factor is the construction of your unit. If it was well-made, and regularly maintained over time, the risks are lower. In turn, your insurance will be cheaper. If the building was poorly constructed or wasn’t taken care of, expect to pay more in insurance. In a similar vein, an older building will often come with higher insurance costs than a new one, as there is more risk of something going wrong or breaking.
Insurance companies will also look into your history of insurance claims. If you have made several claims in the past, you will generally pay more. Also, if you get a more robust total coverage and liability (such as coverage for all items as opposed to named perils), your monthly costs will also be larger. Even the insurance company you work with can dictate your costs. Some companies may be more expensive or cheaper than others. No matter the cost, tenant insurance is still vastly more affordable than having to pay out of pocket for damages.
These questions and factors used to determine how much your insurance will be, are quite similar to the ones companies use to price out home insurance, as well. This is important to keep in mind if you ever decide to buy a home.
How to get tenant insurance
When it comes to how you get tenant insurance, it normally begins with finding your apartment. While insurance companies look at you when making their decision on policy costs, they also need to learn about your dwelling.
In most cases, you will get tenant insurance after you have signed your lease, but before you actually move into the space. As far as where to get tenant insurance, there are plenty of insurance companies to reach out to. You’ll likely be able to find a brick-and-mortar office in your local area, but online insurance companies are becoming increasingly popular.
To find the best deal possible, it’s a good idea to shop around. If you simply work with the first company you contact, you could be leaving a better deal on the table somewhere else. The more companies you talk to, the better sense you will get about how much you should be paying. You can also work with a broker to help you compare the different offers and arrive at a policy that works the best for you.
When purchasing coverage, you’ll need to provide all of your personal information (name, DOB, etc), as well as information about the place you are renting. In some cases, you may also need to provide a list of items to be covered.
Once you have all of this information ready to submit, the insurance company should be able to get you a policy relatively quickly. Insurance companies will then provide you with a document that proves you have tenant insurance. Submit this to your landlord if they require it.
Getting a new apartment can be a mix of exciting and stressful. Give yourself some peace of mind by researching and purchasing tenant insurance. After all, insurance is something you hope you never need, but you’ll be glad you have it if you do.
Need a financial or insurance advisor? We can help. Just take our short questionnaire.