With the rising cost of real estate in Ontario, it is becoming increasingly popular for individuals to rent out investment properties. The rising cost of homes has also made it more popular to rent than it is to buy. Especially for younger couples and small families.
Renting often comes without the hassle of securing a mortgage and homeowners insurance which may be mandated by the bank. But are renters leaving themselves exposed to potentially devastating costs? The answer is that many renters are, and unnecessarily. Tenant Insurance, sometimes called Renters Insurance, is an inexpensive way to protect yourself if you are renting. Whether you rent in a high rise, home, or basement, your wallet may be exposed to a number of unexpected and expensive risks that can easily be protected with a comprehensive insurance policy.
We understand that insurance can be confusing and overwhelming. As your broker, we are here to help you understand what you are purchasing and why you need it. In our mission to make insurance not suck, we have put together some quick, simple and easy to read highlights of why we think you should get Tenant Insurance.
How often is this at the top of the list when it comes to Insurance? If you are only going to read one point in this article let it be this one.
In general, tenants insurance is inexpensive and can cost as little as $25-$55 per month. But what’s even more appealing than the low cost, is the potential savings that you can get on your auto insurance by bundling them together. Most insurance companies offer some sort of savings for bundling and your broker can help you determine what savings is available from your current auto insurance company. In many cases, the 10-15% savings on your auto policy can be more that the cost of the tenants insurance. Meaning you get more insurance for less money! So even if you never need to use it, purchasing tenants insurance can potentially put some money back in your pocket.
This is the part of a tenant’s policy most people are familiar with. Tenants insurance covers the full replacement cost of your personal belongings in the event of a covered claim. This includes such things as theft, fire and many types of water damage which are becoming increasingly common.
It’s important to note that most policies cover your belongings to their full replacement cost including the taxes. This means if all of your items were damaged by smoke or fire and you have to go out and buy every last thing you own brand new, the policy covers it up to your limit of insurance.
When determining the limit of coverage, people often think of their big ticket items; jewellery, cash, laptops, tablets, TVs and furniture. But this coverage doesn’t stop there, it covers your spare toilet paper, kitchen utensils, the food in your fridge and right down to your nail clippers and ice cube trays. If damaged in a claim, this can add up quickly.
Don’t leave yourself unprotected if you don’t have to. Higher limits are often available for small increase in premium, so have your broker help you weigh the options.
You may have noticed that some landlords request proof of insurance before you can gain occupancy of your unit. This is becoming an increasingly popular trend, especially in the GTA and surrounding regions. You might think, “Why does my landlord care that my clothing and electronics have insurance?” The short answer is, they don’t. They care that you have insurance for your legal liability. That is, any damages to a person or property that you may unintentionally cause through your actions or failure to act.
By living inside of a building that is owned by another individual or corporation, you run the risk of unintentionally causing damage to that building which you may be responsible for. Perhaps the dishwasher drain clogs, the bathtub overflows or dinner burns on the stove causing smoke damage to your unit. Maybe even to the hallway and the unit next door. Without tenant insurance, you would personally be liable to pay for those damages out of your pocket. This can be costly.
As a tenant, you may also be responsible for certain maintenance. A common example is clearing snow. Should someone injure themselves before you have time to clear snow, that person may sue the property owner and the person responsible for clearing snow. That means you! In either of these cases, your tenant insurance policy protects you from any legal action that may result and ultimately reimburse any parties with a legal right to recover for such damage which you otherwise would be paying yourself.
As a tenant, it is easy to think that because you don’t own a building you get the benefit of not having to maintain things like a roof, plumbing, appliances and finishes. However, this often also means you have very little control over how well these things work and how often they are maintained. This can lead to some very costly and unexpected expenses when something goes wrong.
It is not uncommon for appliances, plumbing systems and toilets to malfunction and cause water damage to a rented unit. Wind storms are increasingly common in Ontario and can result in torn shingles and water infiltration into a home you may rent. And no home or apartment is immune to fire or sewer backup, which can be devastating ad costly without being your fault.
As a tenant, it is easy to think that because you don’t own the damaged building this is not your problem. But repairs for such claims can take months to assess and repair. During this period, your lease agreement may require you to continue paying your rent while you’re left finding a temporary living arrangement. Even if your lease doesn’t require you to pay rent, you may have the cost of moving all your belongings out of your unit to allow for repairs to be completed, as well as the added cost of finding short term rental, or hotel accommodations, which may cost more than the rent you are saving during repairs. The cost can add up quick and happens without notice.
The good news is that tenants insurance provides coverage for your additional living expenses. This coverage is included in addition to your contents that may have been affected by a covered claim to the landlords building.
Sleep well at night knowing that if something happens you are protected. Take comfort in the stability that your policy provides both financially and mentally. When something happens, you’re only a phone call away from your insurance policy which is there to protect you. And your broker is there to offer you advice and help you navigate the process as smoothly as possible.
Have more questions? Want a quote on tenants insurance? Any member of our service team would be happy to help!
Want to add to this story? Let us know in comments below! Mitchell & Whale is a fast-growing insurance brokerage in Ontario, striving to make insurance _not suck_ one customer at a time. Give us a call today to discuss any of your insurance needs at 1.800.731.2228.