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There are 5 million renter households in Canada, per the last census, meaning roughly one-third of Canadians are renters. And this trend is on an upward trajectory. Despite an increase in overall rental unit supply, demand has outpaced supply for the second consecutive year. Canada experienced record low vacancy rates (1.5%) and record high average rent growth (8.0%) in 2023, creating competitive rental conditions across major markets.
And what do all these renters need? Renter’s insurance, also known as tenant insurance. Some may hesitate, especially when money is tight. It can feel like just another expense. However, it is in everybody’s best interest–the tenant and the landlord–for a renter to have the necessary insurance coverage.
In this article, we’ll look at:
Renter’s insurance cost
What renter’s insurance covers
What you need to know about deductibles
Requirements for renters
Renter’s Insurance Isn’t Very Expensive
Tenant insurance varies by province, but on average, you can expect to pay anywhere from $5 to $50. It depends on the size of the dwelling, the postal code, and how many people live in the home, among other factors. But considering the cost of the average policy versus the coverage, and the cost to you personally if something happens without insurance, it’s reasonable.
What’s Covered?
Renter’s insurance typically covers the items in your rental or on your premises, such as furniture, televisions, computers, washers/dryers, clothes, and jewelry. Policies can insure for theft, fire, and even vandalism. Liability protection is typically included, which insures renters in case a non-resident suffers bodily injury or damage to their property while on your property. Double and triple check that the coverage you’re purchasing covers your needs.
That means understanding the coverage around specific events, such as fire, lightning, explosion, smoke, riot, falling object, vandalism, riot, water damage, windstorm, hail, and such. Your geographical location and neighbourhood have an impact on this type of peril; a particular hazard may be more common in your region.
Generally, policies cover vehicle theft if the vehicle in question is parked in your property’s driveway/garage. There are options for voluntary medical payments and property damage.
Renter’s Insurance Deductibles
This is the amount you must pay out of pocket for each claim before your policy pays. The deductible directly impacts your policy’s premium. The best way to choose a deductible is to pick an amount that fits your needs and your budget. Ask yourself: What can I afford to pay out of pocket unexpectedly?
A best practice when getting insurance is to check with your bank or insurance group and see if they have any savings options. Many will offer discounts when renter’s insurance is bundled with car insurance, or simply because you’re a customer. Also check with your alumni and professional groups for discount options and codes.
Many Landlords Now Require Renter’s Insurance
With record-low vacancy rates, it’s difficult to even find a place, let alone beat others competing for one. Demonstrating to a landlord that you have renter’s insurance gives you a competitive edge.
Landlords have property insurance for the building or house itself, but this doesn’t include coverage for the contents of your unit. According to Settlement.org, it’s a common misunderstanding that if there is a flood or a fire caused by a neighbouring unit or the landlord themselves, they will cover the damages. Without insurance, you would be required to pay for the replacement costs of your belongings yourself.
Another misconception is that if you damage another unit or your landlord’s home, even if by accident, you won’t have to pay. Unfortunately, if you’re responsible, you will have to pay, or you’ll risk being sued.
This is exactly why landlords want tenants to have insurance. Plus, it’s in the best interest of the tenant to cover themselves, their unit, and their belongings.
