If you don’t own the property you live in, do you really need renters insurance? If so, why? Can a Landlord make you carry Tenant Insurance?
Before we look at the five things tenants need to know about renters insurance, let’s take a quick look at what Tenant Insurance is. Tenant Insurance is generally made up of two components:
- Contents coverage for your belongings in the event of damage or theft
- Liability insurance to protect you against claims relating to damage to the property, or to people (bodily injury)
What should you know about renters Insurance?
- Do you really need insurance? The answer is a resounding YES. When you’re renting a home from someone else, it is the Landlord’s responsibility to insure the building structure. But, that doesn’t cover your belongings (contents). If there were an event such as a fire or a flood (not caused by you), the Landlord’s insurance would only cover the damage to the property itself. And if you don’t have any Tenant Insurance, you may be left with nothing.
- How much insurance coverage do you need? That depends on the value of your belongings. Make sure you don’t undervalue your possessions, because if you don’t have enough coverage, you may come up short when it comes time to replace them. Think about all of the everyday items you use in your home and don’t forget to include them – dishes, toiletries, clothing, etc., can all add up to thousands of dollars if you have to replace them all at once.
- What is Liability coverage? And why is it just as important as contents coverage? As a Tenant, you are responsible for any damages you or your guests may cause to the property – if you leave the water running to fill the bathtub and it overflows, causing damage to walls, floors, fixtures etc., you would be liable for the repairs to the building. And while no one plans for something like this, accidents do happen and if you’re not covered, it comes out of your pocket directly.
Repairs to someone else’s property can be very expensive, but what you pay for your Tenant’s Insurance along with the deductible amount, would be minor in comparison, especially if you live in a condo and you flood the floors below you.
- How much liability coverage do you need? In this day and age, probably not less than $1,000,000, but some insurance companies suggest $2,000,000 is more appropriate. This is something you should discuss with your insurance broker, along with the specific “perils” that you want to cover such as fire, water escape, vandalism etc. If someone is injured due to an accident in your home, your Tenant Insurance can help protect you from a liability claim.
- Can a Landlord “make” you have insurance? Yes. If it’s included as a term of the Tenancy Agreement or Addendum to the Tenancy Agreement, and you sign it, then Yes.
Do you have to have it? Maybe not but why wouldn’t you want to be protected? Having adequate insurance coverage is important. It protects you and your family and it protects your belongings.
Need more information?
Ultimately, you have to make the decision that’s right for you and your situation, but at the very least, speak to an insurance broker to find out about the type of coverage you need, and how much it will cost. Obviously, the more coverage you want, the more the annual premium will cost, but in any event, Tenant Insurance is generally quite affordable.
For more information on renters insurance, rental homes in Nanaimo, or any other tenancy or Property Management related issues feel free to contact us. We look forward to answering your questions and finding you the right home!