According to the Insurance Bureau of Canada, about 50% of Canadian renters don’t have tenant insurance.
As a renter, you get to leave many of the important home responsibilities to your landlord, but there is one responsibility left for you: Obtaining tenant insurance. While Alberta landlords are required to carry insurance for the property you’re renting on, this insurance does not include your personal property, including your furniture, electronics, and personal belongings.
To fully protect what you own, you’ll have to call your local insurance broker to find an affordable insurance policy for tenants.
What Does Tenant Insurance Cover?
Many people assume that because they’re renting, they don’t have enough valuable belongings to justify tenant insurance. However, even the simplest set of belongings can cost thousands of dollars to replace – and all during a time when you’ll already be stressed out.
Tenant and renters insurance also goes further than you might think. It also provides personal liability coverage in case someone is unintentionally injured or their property is damaged on your property. It also provides insurance for additional living expenses, such as hotel costs, if you’re required to be off the property due to something like repairs.
Everything You Need to Know About Tenant Insurance
Why You Need It
Let’s start with the most obvious reason tenant insurance a good idea; a landlord’s insurance does not cover the personal property of the tenant. Without your own insurance, your possessions are not protected from loss or damage, so you won’t be able to rely on your landlord. In the case that a home invasion or natural disaster forces you to replace belongings, you’ll find yourself paying replacement costs out-of-pocket.
Content insurance also ‘follows’ your possessions out of the home, so if you have a phone stolen at the gym or while you’re out with friends, you’ll still be covered. This is a great bonus for frequent travellers (and those of us who just can’t seem to keep everything together while we’re away from home!)
Beyond protecting your belongings, tenant insurance also covers personal liability. If someone gets hurt or is unintentionally injured while on the property, it’s covered under your insurance. This also applies to their property – if they bring something to your house and gets accidentally damaged while they’re in your home, that will also be covered.
Lastly, having tenant insurance in Alberta means that any additional living expenses will be covered. For example, if you are required to be out of your home due to something like repairs, your living expenses for hotels or similar accommodations will be paid for you.
What It Doesn’t Cover
As inclusive as tenant insurance is, it doesn’t necessarily cover every item in your possession or cover any kind of incident. For example, some natural disasters may not be covered, such as earthquakes or flooding (not to be confused with water damage, where the water that caused the damage originated from inside the property). You may also need additional insurance for valuable items like artwork or jewellery. It’s also important to note that if you live with a roommate, their possessions won’t be covered. They’ll need their own insurance instead of relying on piggybacking off of yours.
Ultimately, the full insurance coverage varies from policy to policy. It’s important to review your own policy with your insurance broker to see if there are any exclusions under your insurance.
Are You Legally Required to Have Tenant Insurance?
By law, you are not required to have tenant insurance while living as a renter in Alberta. However, potential landlords may require it, as well as proof of the insurance, before they’ll rent to you. This is so they can ensure that you, other tenants, and the property are all protected in case something happens.
Requiring proof of insurance is becoming a more common trend among Alberta landlords (and for good reason). As a renter, you may have a harder time finding a landlord that doesn’t require insurance, making tenant insurance even more beneficial than before.
The Difference Between Actual Cash Value and Replacement Cost
Under tenant insurance, you’ll get to choose between insuring your possessions for actual cash value or replacement cost. The option you choose determines how much compensation you’ll receive for loss or damage.
Replacement cost refers to the amount you originally paid for the item. This means that if your $400 TV was stolen, you’ll receive $400 in compensation. This is the more expensive insurance policy out of the two, but gives you full compensation for your possessions.
On the other hand, actual cash value means the insurance company takes devaluation into account. If you’d had that same $400 television for a few years, you won’t be getting $400 back, but instead what the television is actually worth today. That may mean a few dollars less or hundreds of dollars less, depending on the item and when you purchased it..
Choose carefully between these two options by analyzing the value of your personal property. If you have many valuable items, you may want to consider choosing the replacement cost, even though it’s the more expensive option. If you want to save some money on the insurance and don’t mind depreciation being taken into account, consider actual cash value instead.
Taking a Look at the Policy
Throughout this blog post you’ve learned all about the basics of tenant insurance, from benefits to specifics. However, every insurance policy is different. In order to fully understand the regulations behind your insurance, you’ll need to take a careful look at the policy (preferably with your broker so that you can ask for clarification for specific items). If a policy isn’t suited to you, there’s a chance that you may be paying too much in premiums, or that you aren’t getting the best options and inclusions.
Finding High-Quality Insurance Policies
Finding the ideal renters insurance policy among the many options on the market is often a challenge. That’s why many people choose to work with a professional insurance broker, who will compare prices and policies on your behalf.
At Cornerstone Insurance, we want you to have that perfect policy, and we’re willing to help you find it. If you’re looking for tenant insurance in Edmonton or around Alberta, we’re here for you. Request a quote today or get in touch with our brokers to review your coverage or find the best tenant insurance coverage in Edmonton.