Myth buster: The truth about tenant insurance

Renting and moving into a new home or apartment can be stressful. Tenant insurance, also known as renter’s insurance, allows you to rent a new place with the peace of mind that your belongings are protected. People often forget that the value of their personal items can add up quickly – for example, how much would it cost to replace all of your clothes alone? When trying to learn more about tenant insurance, you might find the internet is filled with information that can lead to confusion and misunderstanding. Rest assured, we’ve got you covered.

Here is the truth behind some of these common myths.

MYTH #1: If I live with roommates, not everyone needs their own tenant insurance policy.

Truth: A tenant insurance policy only provides coverage to the items of the renter who owns the policy. For example, if the TV in the living room is stolen, the individual who purchased the TV would claim the loss under their insurance policy. However, if this individual does not have appropriate coverage, they would need to replace the TV using their own savings. Another important coverage is additional living expenses. This coverage would pay for you to live somewhere else while your building is being repaired due to an insured peril. For this reason, it is important that everyone gets their own personal renter’s insurance policy.

MYTH #2: Damage to the building is covered by my tenant insurance.

Truth: Any damage to property that you don’t own will be covered by your landlord’s insurance policy. If a fire starts in the building and damages the windows, doors and walls, this would be covered by your landlord’s insurance; however, if you cause the damage to the building or another unit, the landlord’s or other tenant’s insurance company can sue you as the responsible party and this is the reason that tenant liability protection is so important.

For example, if you forget to turn off the sink and the water overflows into the unit below, the insurers of the tenants below will pay to replace their water damaged items but will sue you as the water damage started in your unit. If you are living in a multi-unit building, a minimum liability amount of $2,000,000 is recommended. 

If your personal belongings such as electronic devices, jewelry, décor, etc. are damaged by an event that is covered in your insurance policy, then your tenant policy will pay for their replacement or repair. When purchasing tenant insurance, confirm what the limits are for specialty items such as jewelry, artwork and antiques so that you can purchase additional coverage for those items if necessary.

MYTH #3: Tenant insurance does not cover damage caused by my pets.

Truth: Tenant insurance can help to cover damages caused by your pet to your roommate’s possessions, such as a couch or rug. However, if your pet damages your own possessions, you will not be covered. In the event that your pet injures a guest, your tenant insurance policy could also provide you with liability coverage, which would help to cover any medical and/or legal fees.

MYTH #4: The policy I choose doesn’t matter – the cheapest will be fine.

Truth: Choosing a tenant insurance policy based on cost alone may seem like a great way to save money, but it can cost you in the long run if you don’t have the coverage you need! Rather than simply choosing the cheapest policy option, it is recommended to do a proper inventory report of all of your belongings which can help you determine the right amount of coverage for you. This can be done by saving receipts and taking pictures of big-ticket items you might need to claim. Learn more about making a home inventory list. 

Also, ensure the policy you are choosing includes replacement cost rather than actual cash value. Replacement cost will ensure you get new items in replacement of old items. Actual cash value takes depreciation into account so you may not get very much for your belongings. Keep in mind that different policy types exist as well. A comprehensive tenant insurance policy covers all risks except what is excluded whereas a named perils policy covers you for only the perils that are listed in the policy wording.

MYTH #5: I can purchase tenant insurance after something happens to my belongings, and then make a claim for the loss.

Truth: Tenant insurance does not differ from any other type of insurance; you need to have purchased a policy prior to an incident occurring in order to be covered for the loss.

To get a quote for tenant insurance from an OTIP insurance broker today, call 1-833-615-9326. To review your current OTIP policy, call 1-833-494-0089.

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