What is Tenant's Insurance?
Whether you are renting a home in the suburbs, an apartment near work, or a high-rise condo in the city, it may be a good idea to look into tenant's insurance. Tenant's insurance is the same as renter's insurance and contents insurance – these terms are often used interchangeably.
What Does Tenant's Insurance Cover?
Let's say you were making breakfast one morning and accidentally started a fire that damaged your rental unit and the unit beside you. You could be held responsible for these damages. If you had people over and someone slipped and fell in your kitchen, you may be held financially responsible for the cost of the injured person's medical bills. If a pipe burst in your building and all your clothing, furniture, and electronics were ruined from water damage, you would have to repair or replace all of your personal items – which could add up.
Tenant's insurance could cover the cost of damages that you may unintentionally cause to any part of your rental unit, to the building and other units, and for any unintentional harm caused to others who visit the property. It could also:
- Help replace your belongings in the event of a loss or damage due to a covered risk – such as theft, water damage, or fire.
- Help you with other needs after a loss, such as additional living expenses, bills, and food, resulting from an insured loss. This coverage may be subject to certain limits.
- Help protect you and your family in the event of a lawsuit.
Do All Tenants Need Tenant's Insurance?
Although it's not mandatory to have tenant's insurance if you're a renter, it could help you cover expenses that come up accidentally or unexpectedly from a covered loss. You may not realize how costly it may be to repair or replace your damaged items and how relatively inexpensive it could be to have tenant's insurance.
If My Landlord Has Home Insurance, Will That Protect Me?
Your landlord may have homeowner's insurance to protect the physical building structure like pipes, their appliances, and any upgrades they may have made to the unit. But their insurance will not cover your personal belongings if anything happens to them, if you cause unintentional damage to the building, or if someone is injured in your home – that's up to you to protect!
Will Tenant's Insurance Cover Personal Liability?
If someone slips and falls in your apartment, breaks his/her leg and now cannot work for a period of time, tenant's insurance could protect you financially from this personal liability. Keep in mind that coverage depends on whether you are seen as the liable party, or if the landlord is seen as liable. If you have to pay for damages from a cooking fire that damaged your apartment and adjoining apartments in your building, tenant's insurance could protect you in this case, too.
A typical tenant’s insurance policy provides coverage, up to a limit, for the amount that you would have to pay in the event you are found liable for damages to others (liability coverage). You can often buy extra coverage to increase the limit of your liability coverage.
Here are a few basic terms to understand when it comes to tenant's insurance:
- All-Risk means your property is covered against any loss or damage, unless specifically excluded from your policy like intentional damage.
- Contents means personal property (in most cases) in your home that you own. It also covers contents that may be temporarily removed from your home – like when you travel. Some contents, like jewelry and collections are subject to limits. The good news is, you can discuss options to increase coverage for such special items.
- Personal Liability insurance protects you if someone visiting the premise is unintentionally injured in your home, or if you've damaged someone else's property and now have to pay for damages.
- Replacement Cost Coverage means that the contents of your home are insured for the amount it costs to replace them without depreciation, up to the amount of insurance.
- Additional Living Expenses Coverage will pay for additional expenses (like hotel and food costs) in the event you are forced to leave your home following an insured peril (or risk) for a reasonable period of time required to repair your home or permanently relocate elsewhere.
As mentioned above, in some cases you will hear tenant's insurance referred to as contents insurance. Typically, this insurance option provides all-risk coverage for your contents (personal property) on a replacement cost basis. Most policies also provide coverage for personal liability and additional living expenses.
Home Insurance Offered by TD
TD Insurance offers different types of home insurance coverage depending on your unique needs. If you're a student renting a home with other students, you may want to get specific tenant's insurance for students to protect your laptop or textbooks. If you're moving within Canada, you may want specific coverage for your travelling contents and contents in your new residence. We offer home insurance in all provinces and territories – speak to a TD Insurance advisor to see how we can provide you with the right coverage for your needs.