The Ultimate Guide to Tenant and Renters Insurance
If you rent your home, it’s important to have tenant insurance for a number of reasons. However, not all tenant insurance policies are the same. That’s why our team of insurance brokers at Cornerstone Insurance has put together this ultimate guide to tenant insurance. We want to help you make confident decisions about your insurance coverage.
In this guide, we’ll discuss what tenant insurance is, why you need it, and how to get the best coverage and deals on tenant insurance. So, whether you’re a first-time renter or looking for ways to save money on your current policy, read on!
What is Tenant and Renters Insurance?
Is There a Difference between Tenant and Renters Insurance?
Renters insurance and tenant insurance are one and the same. Different insurance companies and brokers may use either term to describe the insurance required by someone renting a home.
The most important items for tenants to remember when it comes time to buy renters’ protection policies from their insurance companies are covered in this guide.
Who is Tenant and Renters Insurance for and What Does it Typically Cover?
Tenant/renters insurance is designed for those who are renting or occupying a property that they do not own. Although as a tenant, you do not have a financial interest in the building itself, there are some belongings and events which can be protected by an insurance policy. In fact, tenant/renters insurance offers a greater amount of coverage than most people expect. A tenant/renters policy can cover:
- Personal belongings, including furniture, electronics, clothing, household items, and much more.
- Personal liability.
- Identity theft.
- Living expenses in the event of an insured loss.
What are Renters Insurance Riders, Endorsements, and Floaters?
Renters policies may also include additional coverages, such as sewer backup coverage or coverage for high-value items, including jewellery, artwork, or collections. These are known as riders, endorsements, or floaters. Let’s look at some examples of each:
- Insurance riders change the original contract, often to increase coverage for items that are limited within the standard policy. Examples include increasing the jewellery limit or adding sewer backup coverage.
- Insurance endorsements are the same as riders.
- Insurance floaters are like riders, except they apply to a specific item. For example, you could add a floater to your renters policy to cover a particular item of jewellery to its appraised value, such as adding a floater for a 10k gold diamond ring worth $8575.
How Much Does Tenant or Renters Insurance Cost and How Do You Get It?
What is the cost of tenant insurance in Alberta?
Tenant insurance in Alberta typically costs around $20-$30 per month. The cost typically ranges from there, but can vary greatly based upon individual circumstances. The rate you are quoted depends on many factors, including the value of the items you are insuring, the type of home you are renting, your previous claims, and much more.
Many factors will impact the price you are quoted, including the type of property and the features of the property. Some of the questions you may need to answer in order to receive an accurate quote for tenant insurance are:
- Does the property have a wood-burning fireplace?
- Does the property have a sump pump?
- What type of residence is it? (i.e. detached single-family, apartment, townhouse)
- The age and specific location of the home.
- Any past claims you may have had for other tenant insurance policies.
What is the cost of tenant insurance in Edmonton and Calgary?
The cost of tenant insurance is often similar in Edmonton and Calgary, depending on your postal code. There is no flat rate for a city. However, whether your property is rural, suburban, or urban may affect your quote.
Is Renters/Tenant Insurance Mandatory?
Although tenant/renters insurance is not mandatory in Alberta, it is highly recommended that all renters obtain it for two main reasons.
First, many landlords choose to require proof of insurance as part of the contract or lease agreement. A landlord’s home insurance policy does not cover expenses incurred by long-term renters and will not cover a renter’s belongings. A roommate’s policy also will not extend to other people living in the home or rental unit, so if you have roommates, it is important that each renter has an individual policy.
Second, renters insurance is incredibly important for recovering expenses when unexpected events affect you, your living situation, or your belongings. Costs of replacing items and paying for unexpected living expenses, such as a hotel stay, can add up very quickly.
What Are the Benefits of Tenant Insurance, and Why Should You Have It?
Tenant insurance is relatively affordable and offers a great amount of coverage for a variety of events. Perhaps the most important reason for obtaining coverage for most people is the ability to replace their belongings if they were damaged. Once you add up all of the items in your house, including furniture, housewares, clothing, personal items, electronics, and decor, you may quickly find yourself in the tens of thousands of dollars. This alone makes tenant insurance a great choice for renters.
Second, tenant insurance covers expenses for alternative living arrangements if the property is damaged by an insured loss and you’re not able to live there for a period of time. For example, you may need to stay in a hotel or short-term rental for some time while damage to your rented home is repaired. Depending on the cost of a hotel room, this could easily double or triple your typical nightly cost of living.
Tenants insurance covers your personal liability anywhere in the world, not only at the location specified. This means that even while you are travelling, at work, or at the gym, you have coverage for any events for which you may be held personally liable.
Finally, your contents are also covered if they are temporarily removed from your residence. For example, if your car is broken into and your suitcase full of clothes or your new set of golf clubs are stolen, your auto insurance would only cover the damage to the vehicle. However, your tenant policy would provide insurance coverage for the stolen contents.
What If You Don’t Have Tenant or Renters Insurance?
If you don’t have tenant’s insurance and something happens at your property, you will be on your own for all expenses, including replacing your belongings and any alternative accommodations you may need. Furthermore, if you do not have personal liability coverage and you are sued for an event such as an injury on your property, it can have devastating financial consequences for the rest of your life, depending on the extent of the loss.
Tenant & Renters Insurance FAQ
What if something happens to your belongings—will your landlord be responsible for replacing them or reimbursing you for your losses?
The landlord’s insurance policy only covers the contents owned by the landlord. The landlord has no obligation to reimburse you for your lost contents. The same applies to roommates.
What else should tenants know in order to make an informed decision about tenant insurance?
Tenants should make sure that the policy purchased includes replacement cost coverage for contents. This means you will be able to fully replace all of your items. Without replacement cost, you would receive the depreciated value of your items, making it near impossible to replace anything without paying significantly out of pocket.
Tenants with high valued items (such as jewellery, bicycles, or collections) should speak to an insurance broker to confirm the limits available within the standard policy. These specific items often have maximum limits of coverage that can be extended when requested.
Finally, it’s always a good idea to determine if you require additional coverage for overland water and sewer backup coverage. You might think you only need these if you live in a basement suite or on the main floor, but some insurance companies consider even an overflowing toilet as a sewer backup. Be sure to discuss this with your broker to find the best options.
How do I file a claim if something happens to my belongings while they’re insured through my tenant policy?
Claims can be filed by contacting your insurance broker at Cornerstone Insurance during business hours. If there is an after-hours emergency claim, each insurance company has an after-hours claims phone line for the clients to call. If it’s not an emergency, you can call your broker on the next business day.
Getting the Right Tenant or Renters Insurance for You
If you are a tenant or renter, it is important to understand how tenant insurance works and the many ways it offers protection and peace of mind. If you are considering purchasing a policy, be sure to do your research and speak with a professional insurance broker so that you can find the best coverage for your needs at a great price. Get an instant quote today to learn how much money you could save on your tenant insurance premiums.