Many Canadian Renters Don’t Have Tenant Insurance – Do You?
Almost 50% of Canadian renters don’t have tenant insurance. Do you? Regardless of how much you own, it’s a good thing to have.
A recent survey found that almost half of renters in Canada don’t have tenant insurance leaving them at risk of costly repairs or replacement of important and valuable personal belongings.
Conducted across the nation in August, 2021, TD’s Tenant Insurance Survey identified that, out of the 491 Canadians surveyed, a whopping 41% did not have tenant insurance.
What is tenant insurance?
As a tenant, it’s possible for you to be liable for damage caused to the unit you are renting – any part of the building. If you are responsible for the damage and don’t have insurance coverage, you could be on the hook for significant repair or replacement costs.
Tenant insurance was designed to protect not only your belongings but also any personal liability that your landlord’s coverage doesn’t. Even if you rent for a short time, tenant insurance will ensure that you can replace the contents of the rental in cases of an insurable loss.
Tenant insurance protects you in the case of damages, but it also helps to contribute to your claims-free history. When you have several clean years without a claim, chances are, many insurance brokers will even offer you a discount.
Why Canadian renters are uninsured
Many may not know, but the purchase of tenant insurance isn’t an automatic one after renting a property. Even though it ought to be. Some renters feel like they don’t own enough that’s of value to insure or consider what they do own too costly to cover. Many feel that they have coverage under their landlord’s homeowner’s or roommate’s policy. Consequently, Canadians are putting themselves at financial risk by forgoing tenant insurance.
When it comes to the landlord’s property insurance, it covers the building or structure only. Your landlord’s policy does not cover the contents of the rental units. And, when it comes to common risks such as fire or water damage and theft, tenants are left holding the bag.
While not a legal requirement for Canadian renters, some landlords include it as mandatory in their rental agreements. 49% of survey respondents, in fact, stated that they had to purchase tenant insurance as required by their landlords.
43% of the survey respondents identified personal electronics, such as laptops and mobile phones, cameras, and televisions, as their most valued possessions. Possessions they would like protected against loss or damage. For 22% of respondents, furniture was next on the list, followed by jewellery, clothing, and recreational equipment.
Renters need protection
The risk of being uninsured is that renters risk being held financially responsible for damage to the rental unit. They could face significant repair expenses in addition to the steep costs of replacing their valuables. About 20% of the respondents claimed that they could replace most, if not all, of their personal belongings without the help of insurance. However, the majority – 51% of the survey respondents – stated they would struggle to replace their belongings if they had no insurance.
The findings of the survey confirm how important education is when it comes to the benefits of tenant insurance. By nature, people tend to underestimate or brush off potential risks such as property damage or theft. We tend to think, “it couldn’t happen to me…”. Particularly if it means spending money to get out ahead of possible catastrophe if we don’t have to.
But, think about how costly it can be to replace or repair your belongings. Or worse, consider the potential costs of covering repairs or replacement to the home you rent. An ounce of prevention really is worth a pound of cure. After all, protecting a home with insurance isn’t just for homeowners. It’s a smart solution for renters to protect their valued personal belongings if their damaged or stolen as they protect themselves from possible costly damage to their rental unit in the event of the unexpected.
Consider, too, that under a tenant’s policy, there is also liability coverage. In the event someone gets hurt on the property, liability coverage protects the insured. Remember that both the tenant and the landlord can be held liable if someone hurts themselves and seeks compensation.