What is renters’ insurance and why do I need it?

What is renters’ insurance and why do I need it?

Renting in Toronto isn’t exactly cheap these days. So why would you add the expense of renters’ insurance (also known as tenants’ or contents insurance) to your monthly budget? Well, because life could get a whole lot more expensive if you don’t have it. 

Wait, doesn't my landlord's insurance policy cover my stuff?

Nope. Your landlord’s insurance covers the condo or house itself – from the walls and kitchen cabinets to the tubs and toilets. What it doesn’t cover, however, are the items that actually belong to the tenant. It also won’t protect you if someone is injured in your apartment, or you’ve accidentally damaged the property (hello, overheating crock pot). And if you end up having to live somewhere else while your place is being repaired after a fire, break-in or other damage, their insurance won’t pay for that either: that’s on you. 

Renters' insurance covers three key things:

1. Your personal property. If there’s a fire or a break-in, the insurer will pay to repair or replace the contents – the items you own. Things like furniture. Clothing. Electronics. Art. Some items, like jewellery or fancy camera equipment, may require additional insurance – a rider (a small policy for a specific item) can ensure those things are taken care of, too. Tenants’ insurance will usually also cover the contents of your car, though not damage to the car itself (that’s what your auto insurance is for). 

2. Liability. Renters’ insurance also protects you if you accidentally damage your unit or the units and communal areas near you. Without insurance, you’re on the hook for those costs, which can be pretty extensive. And if someone is injured in your home and there’s a lawsuit, you’re covered there, too. 

3. Additional living expenses. If you can’t stay in your home while it’s being repaired, tenants’ insurance can cover living expenses (hotel stays, meals, moving costs, etc.) that are above and beyond what you pay for rent. So if your rent is $2,500 but you’ve had to stay in a hotel or Airbnb to the tune of $4,000, insurance will cover $1,500. Note, however, that not all policies include this. Read the fine print, and if it’s not clear, ask for it specifically. 

Do I have to have contents insurance?

It’s not mandatory in Ontario, so no, you don’t have to have it. But it is a good idea. It isn’t very expensive (probably a bit more than your monthly Netflix subscription). Compare that to the cost of replacing your phone or your laptop, not to mention your furniture and your clothes, and it starts to look like a pretty good deal. Also, many landlords make it a condition of renting with them.

How much insurance do I need to pay for?

That depends on how much stuff you own and what it’s worth. Think about how much it would cost to replace everything you own, from your furniture to your dishes and cutlery to the clothes and shoes in your closet. It helps to do an inventory – once you add them up, you’ll probably be surprised how much it would be to buy everything again. Your best bet is to talk to an insurance agent or broker – starting with the company that insures your car is a good start. 

Looking to rent a great condo in the GTA? Start your search now on condos.ca – or contact a Property.ca Inc. agent to find you a perfect place. 

Join over 71,000 subscribers and get market news, insights & expert advice delivered straight to your inbox
Categories