Are you living in a let-out property, or will you rent one? Do you want to protect all your belongings and assets? There is a possibility that your landlord’s property might suffer damages because of an act of your omission. Do you wish to cover this loss?
Well, tenant insurance works precisely in the same way and is an excellent product that can help you gain peace of mind. We have carefully designed this article and have covered everything under the roof.
What Is Tenant Insurance?
“I have always lived on rent and have always been a cooperative tenant. Unfortunately, it was the summer of 2022. Because of my act, my landlord’s property suffered some severe damage. I pleaded, but none came to my rescue. The property owner handed over a claim of over $40,000.”, said Emma Wilson, a tenant at a property in the Greater Toronto Area. Emma faced is a situation quite common and happens every day with every tenant. However, the issues can go beyond this, and there are multiple instances where there is a:
- Theft of your belongings from the rented accommodation
- Partial or complete damage to your assets, such as furniture, television, and other electronic gadgets
- Your negligence caused bodily injuries to the other parties, such as the property owner, family living around, other co-tenants, etc.
- Occurrence of moving costs and you are shifting from one place to another.
A tenant insurance policy is an insurance product that aims to protect you (the tenant) from all the financial losses related to your rental home. We know it as a renter’s insurance, and the terms “tenant insurance” and “renters’ insurance” and we can use it interchangeably.
How Does a Tenant Insurance Protect the Tenants?
A tenant insurance policy protects in three different situations or phases. These are:
1. Your Belongings
When you live on rent, no matter how well furnished your rented condominium is, you got to take a few of your belongings with you. Furniture, clothing, jewellery, and other personal assets are typical for the renters to carry with them from one rented accommodation to another.
A tenant insurance policy protects the tenants by covering all the losses incurred upon loss or damage to their belongings, which are present inside your rental home or any rented vehicle.
2. Your Living Expenses
It is common for property owners to keep maintaining and renovating their property periodically.
Sometimes the scale of renovation is such that your property owner might request you to seek accommodation temporarily at some other locations that charge on a per-day basis. It could be anything from hotel rooms to hostels to other forms of paying guest accommodations. When this happens, you are suddenly required to bear the high per-day rent that might create a hole in your pocket. If the renovation is not \complete, your property owner might not usually allow you to return.
In such a case, a tenant insurance policy can come to your rescue, as it covers:
- Your expenses, which you incur because you were living in a hotel accommodation
- All your moving costs incurred while you were shifting your belongings
3. Personal Liability Claims
It is a possibility that during your stay at the rental accommodation, your property owner might hold you responsible for:
- Causing any bodily injury to any person who is:
- Your property owner or family members or
- Living in the rental accommodation with you in any capacity
- Causing damages to the rented property in which you are living
In such cases, a tenant insurance policy can protect you from all the financial losses of personal liability claims.
How Does It Work in Different Situations?
|Theft of belongings
|• You moved in with your furniture, electronic gadgets, antiques, jewelry, and other personal belongings
• You went out for work in the morning and when you came back you realized that a burglary has happened in your rented house
• All your stuff worth $50,000, except furniture is gone
• Since you were having a tenant insurance policy, you claimed reimbursement for most of this loss
|Your property owner is renovating the rental house.
|• You are living in rented accommodation that is in a bad shape
• Your landlord approached a few contractors, and he wishes to get it renovated completely
• The renovation would take 25 days (as per the contractor’s estimate) and till then you will be required to stay in a hotel
• There is a budget hotel near your office, which charges $80 per night
• You stayed there for 27 days and the total expense came out to be $2,160 (27 days * $80per day)
• You also incurred additional moving costs worth $340
• You were able to recover this cost of $2,500 ($2,160 + $340) using tenant insurance policy
|You scratched the wooden flooring of your rented accommodation
|• You recently moved into a rental accommodation
• You felt the need for a bigger couch, and you decided to replace
• You sold your old couch and bought a new one
• While you were unloading your new couch, you scratched the branded wooden flooring of your rental house
• Your landlord was quick to recognize this loss and handed over to you a claim worth $14,000
• You were having an active tenant insurance policy that covered most of your loss
What Is the Cost of a Tenant Insurance Policy?
Several insurance companies in Canada offer a tenant or renter insurance policy. The rates typically vary from company to company and depend upon the quantum of coverage.
You need to pay the monthly insurance premium for this policy. And it may start from $10 to $12 per month.