Matt Hands, VP, Insurance and MoneySense
Tenant insurance (otherwise known as renters insurance, contents insurance, or apartment insurance) gives you the benefits of a homeowner's insurance policy but without coverage for the physical dwelling. The landlord's insurance covers the building, not yours.
Generally speaking, there are three types of coverage on a basic tenant insurance policy: liability insurance, contents insurance, and additional living expenses. By paying our regular premiums to your provider, you'll be protected financially from all different types of tenant-related emergencies.
If you're looking for tenant insurance in Canada, we’re here to help you choose better. You can get a customized tenant insurance quote online with us in under five minutes today – all from the comfort of your couch.
Tenant insurance isn't mandated by law in Canada, but many landlords will require you to purchase coverage as a stipulation in the lease agreement. And even if that's not the case for you, it's a good idea to get insurance anyway.
While your landlord may have their own home insurance policy, that doesn't mean you're immune to risks as a renter. Landlord insurance (or rental income property insurance) is only there to protect your landlord from their own financial implications, such as building damage or a tenant liability claim. You could still face your own financial troubles as a renter for all different reasons, such as the loss of your belongings due to a break-in.
As a renter, it's important to understand the coverages on your tenant insurance policy. While a standard package may be enough, you can also add optional endorsements to better suit your coverage needs.
Included types of renters insurance coverage
Optional types of renters insurance coverage
How much is tenant insurance?
So what is the average cost of renters insurance? Renters insurance across Canada typically ranges between $20 to $50 each month, but this will depend many different factors. Be sure to compare renters insurance quotes before you purchase a policy to make sure you get the best rate on the market.compare quotes
There are many different factors that will impact the cost of your tenant insurance coverage. Here, we cover eight main ones, so you can better understand the quoting process for your policy.
A studio apartment comes with different risks than a basement unit. So your provider will take your property type into account when calculating your tenant insurance rate.
Renting in a neighbourhood prone to theft and vandalism can increase your rate substantially. And flood-prone areas also won't reflect well on your tenant insurance premium.
The more items you have to insure, the more expensive your coverage will be. Some valuables (e.g. artwork) may also require extended coverage limits for an added cost.
Not all tenant insurance companies look at credit to calculate your renters insurance rate. But if you can opt-in for a soft credit check, you may see a discount for having a good score.
Did you know owning a pet can increase the cost of your renters insurance? This is especially the case for vicious dog breeds – due to the added risk of a liability claim.
Do you live with others? The more people there are to insure, the more expensive your coverage will be. Also keep in mind that it's often a better idea to buy separate policies when living with roommates.
If you've made several property insurance claims in the past, this will reflect poorly on your tenant insurance rate – providers like to see low-risk customers.
Be sure to ask your provider about any available discounts. For instance, just having a fire extinguisher on hand can save you a few bucks each month.
In a recent survey conducted for our Digital Money Trends Report, we found that less than 50% of renters in Canada actually have tenant insurance in place. Only 48% of renters surveyed claimed to carry coverage.
If you're part of this group, you may be under the impression that tenant insurance isn't a necessity. And while it isn't mandated by law, this is not true. Statista reported four reasons why tenants in Canada believe they should forego coverage, and here, we explain the invalidities behind each one and why you should highly consider getting a policy anyway.
"Renters insurance is too expensive."
"I don't have enough contents to need renters insurance."
"My landlord has coverage, so I don't need renters insurance."
"My roommate has renters insurance, so I don't need it."
While insurance companies are the ones to quote you, that doesn't mean you can't take matters into your own hands. Here are eight different tips you can test out to ensure you're getting the cheaper tenant insurance rate on the market.
Shop and compare
At Ratehub.ca, we take the work out of monotonous phone calls and visits to many different brokerages. By entering your information once, we can show you quotes from Canada’s top insurers.
Insurance companies often give discounts to customers who get multiple products from them (e.g. tenant and auto insurance). Look to bundle multiple policies for a cheaper rate.
Install monitored alarms
Having a monitored alarm system installed – one that is connected to a central station – can lead to a discount on your policy. This typically won't include your own cameras and motion sensor lighting.
Increase your deductible
The standard tenant insurance deductible is about $500. If you increase the deductible (the amount of money you cover before insurance pays the rest), you'll see a decrease in your premium.
Limit your claims
A clean claims history looks good to insurers. If you submit a claim, make sure it's worth it. Never submit one for less than your deductible – claims should be reserved for times of significant financial distress.
Paying your premiums on an annual basis, as opposed to monthly, reduces your insurer's administrative costs while showing loyalty – so you may be rewarded with a cheaper rate.
Review your coverage
Make sure you aren't overinsured. Document your contents properly and review their value with an annual audit of your belongings – you won't need $1,000 in coverage for a TV that's only worth $500.
Get a group rate
Some insurance companies offer special discounts to school alumni and working professionals (e.g. CPA). It won't hurt to ask your insurance representative about any eligible discounts.
While tenant insurance can cover various different risks, here are three different examples of common claims in Canada – and how having the right coverage in place can protect you financially.
In 2021, over 125,500 cases of breaking and entering were reported nationwide. With tenant insurance, however, you won't be on your own when it comes to replacing all your prized possessions.
According to IBC, basement floods cost an average of $43,000 to repair. And while tenants might not be financially responsible for building damage, you'll still want coverage for all your contents.
In recent years, structural fires have accounted for over 60% of all fires in Canada. If your unit burns down, a renters insurance policy can help replace your items and pay for temporary accomodations.
Shop for Canadian renters insurance online today.
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Now that you've become an expert on all things tenant insurance, let's take a quick look at the rental market in Canada. Here are some interesting facts we found, according to the Canadian Rental Housing Index.
4,441,015 million households in Canada rent instead of own – While nearly 4.5 million households rent, there are over 9 million households that own their home. Renters make up about 32% of the household population within the country.
The average cost of rent and utilities in Canada is $1,002 – While this is representative of Canada as a whole, the average cost is slightly higher in the most populated province, Ontario – tenants see an average monthly payment of $1,109.
The average renter household income in Canada is $53,163 – Tenants in Canada spend an average of 23% of their income on rent and utilities. But with that being said, 18% of the renting population still uses up half their income on these expenses.
of households in Canada rent their property instead of own.
of Canadian households spend over half their income on rent and utilities.
How do I get renters insurance?
Securing your renters insurance policy is easy – by providing us with a few details, we can show you customized renters insurance quotes in under five minutes. We can also connect you to an insurance agent to help finalize your tenant policy and answer any questions you may have.
What does renters insurance not cover?
There are a few situations in which renters insurance will not cover you. This includes any loss as a result of deliberate actions caused by the insured (including criminal acts), damage due to overland or sewage flooding (provided you don't have the proper flood insurance in place), as well as damage due to war or terrorism. And you also won't be covered if you're property was illegally acquired.
What is tenant liability insurance?
The liability portion of your tenant insurance policy protects you against third-party claims of bodily injury and property damage. For instance, if a friend comes over and slips on your wet floor, you could be held legally responsible for their injuries. In this case, having tenant insurance can help pay for the medical bills and legal fees involved.
Does each tenant need renters insurance?
Yes, it's recommended each tenant has their own renters insurance policy. If you have roommates and everyone's belongings are damaged in a flood or fire, only those protected by their own tenant insurance policy will have coverage for their contents. Also, renters insurance can pay for you to live elsewhere during renovations, but it won't cover your roommate's expenses.
You may be able to list multiple roommates on a policy, but make sure you're aware of the risks of doing so. Shared insurance policies lead to shared insurance histories. This means that if your roommate were to make a claim, it could lead to future rate hikes in your property insurance, even if the claim had nothing to do with you.
How do I get cheap tenant insurance in Toronto?
Comparing quotes is one of the best ways to get cheap tenant insurance in Toronto. Different providers offer different rates, so you won't know what your cheapest options are until you shop the market. Keep in mind there are also many external factors that will influence the price of your policy, including your location, your contents, and your insurance history – by lowering your risk with these factors (e.g. choosing a safe location, keeping a clean claims history), providers will quote you for less.
Does homeowners insurance cover renters damage?
Landlord insurance protects the building, detached structures, and the landlord's belongings. Home insurance does not protect the renters' belongings. If a renter damages the unit, a tenant insurance policy may repair it. If no tenant insurance policy is available, you may turn to the landlord's insurance, but it could likely end up in a court dispute.
To avoid problems, it's best that each person is insured on the property. If both have insurance, and there is damage to the rental unit, it's possible for it to be claimed by the landlord's policy, and the tenant's policy could potentially pay the landlord's deductible.
Does tenant insurance cover bed bugs?
Unfortunately, no – depending on your provider, you may be able to add rodents or vermin onto your policy, but generally speaking, bed bugs, mice, rats, or any rodent damage are seen as a maintenance task to be carried out by the renter or landlord.
Can renters get flood insurance?
Yes, flood insurance is available as an add-on to any tenant insurance policy. Call your broker or insurance provider to find out the details. Floods come in many forms – a burst pipe is typically covered, but heavy rainfall or sewer backups may require an endorsement.
Does renters insurance cover holes in the wall?
No, and it's likely not worth making a claim. You can patch the work yourself or hire a professional. If not, the landlord may take the repair costs out of your damage deposit.
Do you need sewer backup insurance in an apartment?
Whether or not you need sewer backup insurance depends on the type of apartment and the level of risk it brings. For instance, if you live on the tenth floor of a condo building, you likely won't need sewer backup insurance. If you live in a basement near water, on the other hand, sewer backup may be a top priority.
However, know that if there is a clog in the drain below your unit, all the flushing from the units above yours could spill out through your bathtub and sink drains. Though rare, this is a situation in which sewer backup insurance could come in handy for an apartment unit.
Do renters require a credit check for tenant insurance?
Unlike getting a standard home insurance quote, a provider does not generally require a soft credit check for tenant insurance, but if the option is available, it will help to reduce the price you pay. Insurance companies have noticed a relationship between someone’s credit score and their likelihood to file a claim. The higher your credit score, the less likely insurers expect you to make a claim. Your landlord may also want a credit check.
Can I rent my apartment on Airbnb?
Check with your landlord first. It is a high-risk endeavour – Airbnb does offer insurance for their hosts, but if you need more coverage, or if your landlord needs more coverage, there are only a select few providers that offer home-share or short-term rental property insurance. You could void your existing policy if you home-share without notifying your provider.
For more information, check out our blog on how Airbnb insurance works in Canada.