Why Tenant Insurance, and Why You Need It

Tuesday, June 11, 2013

Renting with tenant insuranceWhether you’re new to homeownership or are purchasing a residence for the first time, many Canadians understand that home insurance is something that's required for them to purchase, as this is a coverage that lenders typically require before they approve a mortgage. Renters, meanwhile, don't need coverage in order to live in an apartment. Whether it's Alberta tenant insurance or some other place in the country, ultimately the only thing a renter needs is a job and good credit.

But as the Insurance Bureau of Canada points out, it would behoove renters to purchase a tenant insurance plan, as the consequences of not doing so can be extraordinary.

Some people are under the impression that if their landlord is insured, that also means that they're covered as well. In reality, the landlord's insurance is strictly for the structure of the building in the event there is a fire or some type of environmental catastrophe takes place in Alberta. It doesn't cover the contents of what's inside the residence, though.

Tenant insurance replaces belongings that are damaged, stolen

That's where tenant insurance comes in. As IBC points out, this type of coverage replaces a renter's belongings should they be damaged after a flood, weather disaster or a fire. Over the course of time spent living in an apartment, a lot of expensive things may be accumulated. If these items are stolen or destroyed, replacing them without a policy in place can be extremely expensive. But tenant insurance can give renters the sense of assurance and comfort that they will be financially compensated if their belongings are lost or destroyed.

But it's not just the replacement of belongings that tenant insurance provides for. IBC notes that depending on the situation, some tenants may need to abandon their apartment after a fire or weather disaster because the damage renders the structure uninhabitable. If renters aren't able to secure housing with family or friends, they may have to pay for living expenses in a hotel or motel.

Once again, tenant insurance takes care of these costs as well. While the apartment is being repaired, these policies may pay for hotel bills, food bills at restaurants and associated moving costs, the limits of which depend on the policy.

Liability covered under tenant insurance

Another benefit of home insurance is that it pays for incidents wherein the policyholder may be to blame. For instance, if a friend of theirs comes to the home and falls after slipping on an icy driveway, the injured party could sue them for what medical costs result. Their plan will help provide for the what liability costs arise.

Tenant insurance works the same way. If someone is injured while in a policyholder's unit, tenant insurance will provide them with the financial compensation they need to pay for what medical costs result.

Similarly, if a fire breaks out within a unit, causing damage to the other tenants' belongings, they could be sued for that as well. With a policy in place, though, these potential expenses are provided for.

One of the benefits of renting is that for the most part, it helps keep the tenant's living expenses low, as some of their monthly rent often includes utilities like heating, water and electricity.

This ought to leave plenty left over for tenant insurance, which is traditionally very affordable. Despite this, many Canadians don't bother purchasing a policy. According to a recent poll conducted by Environics Research Group, nearly 50 percent of renters under the age of 35 don't have a plan in place.