Tenant Insurance

38% of Canadians rent their primary residence rather than own it, but that doesn’t mean that home insurance isn’t an option or a concern. Tenant’s insurance is a cost effective and viable option for nearly six million people across the country, but nearly half don’t bother with it – leaving them underinsured and at risk. Let’s look at why this might be, and why tenant’s insurance is an important consideration for renters everywhere.

Top Tenant Insurance Companies and Brokers in Canada

Home Insurance, Condo Insurance & Tenant Insurance
Pricing varies by product
British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario
Business Insurance, Homeowners Insurance, Renters Insurance
Pricing varies by product
All of Canada excluding Quebec

What is Tenant’s Insurance?

Simply put, tenant’s insurance (also known as renter’s insurance) is an insurance product aimed at people renting rather than owning their home, and it typically covers all of that person’s possessions within the home, as well as their liability for accidents or damage occurring at the property.

In many cases, tenant’s insurance is optional, but some landlords require their tenants to have their own insurance policy through a clause in lease agreements.

How Does Tenant’s Insurance Work?

Tenant’s insurance works much like any other insurance product; you pay monthly or annual premiums in exchange for financial coverage in the event of loss or damage to your possessions within the home, or in the event of damage occurring to the property for which you are responsible. It also covers you for liability claims, in case you accidentally cause damage to the building itself or other units within the property (for example, if you cause a flood or a fire). You do not have to own any part of the home in order to have tenant’s insurance, and the insurance is completely separate from your landlord’s home insurance policy.

Doesn’t My Landlord’s Insurance Cover Me?

It’s important to note the difference between your landlord’s insurance and yours. Your landlord should and probably does have home insurance for the property in which you live, and this covers the building’s structure, their liability, and so on. But it does not cover you, your possessions, or your liability. You will not be named on their policy at all.

The same is true if you have a roommate and they have their own tenant’s insurance. This is their policy, not yours, and it will not cover you or your stuff. This is often misunderstood, and nearly 30% of those without tenant’s insurance falsely believe they are already covered under someone else’s policy.

What’s Included in Tenant’s Insurance?

There are three main areas covered by tenant’s insurance:

1. Contents

This means all of your personal possessions in the home, such as clothing, furniture, electronics, and so on. Insurance companies offer different levels of coverage, so you can select the right amount for you. The range is usually from as little as $20,000, to $100,000 or more. The higher your coverage limit, the more your insurance will cost.

2. Personal Liability

25% of tenants without insurance say they simply do not have enough stuff to insure, but they’re forgetting the huge bills they may face if they cause damage to the property itself, to other people’s possessions within the property, or if someone has an accident and is injured while in their home. Liability insurance protects you in these cases, and most policies offer $1 million of coverage as standard.

3. Additional Living Expenses

Lastly, if something does happen to your home, finding alternate accommodation can be expensive (especially when last minute). Additional living expenses coverage will pay for the cost of your temporary rental - but only up to a certain point. Every policy has slightly different wording, often capping how much you can claim in additional living expenses, and requiring you to find a ‘comparable’ rental to the one you were living in before. So always check the fine print.

All of these items are covered for specified events, such as:

  • Theft
  • Fire
  • Flood or water damage
  • Loss
  • Lightning

What’s Not Included in Tenant’s Insurance?

Tenant’s insurance is specifically designed to address the core needs of the majority of Canadian renters, so there are many items that are not included in its coverage. This includes:

  • Any incidents that occur when you are subletting the home (even on a short term basis, such as through AirBnB)
  • High value items, like expensive jewelry or artwork (you can get these items insured separately, or included as an add-on, for an extra cost)
  • Household items provided by your landlord (e.g. kitchen appliances)
  • Damages caused while engaged in an illegal activity

What’s the Difference Between Replacement Cost and Actual Cost?

When considering tenant’s insurance, it’s crucial to understand the terms of your insurance policy - especially as they relate to replacement cost versus actual cost. Insurers may use either when calculating payouts, but they are very different.

The actual cost of your items is what they would cost today, in the condition they are currently in. But replacement cost is what it’d cost to buy similar or the same again, or to repair them to their original condition. Replacement cost is higher than actual cost, as it does not take into account depreciation. Make sure you know what your policy covers.

How Much Does Tenant Insurance Cost?

Tenant’s insurance is much cheaper than home insurance, with the average Canadian paying $23 a month. But this exact cost depends on:

  • The level of insurance coverage you choose
  • Where you live
  • Your claims history
  • Your deductible
  • The type of unit you live in

Frequently Asked Questions About Tenant's or Renter's Insurance

Why do I need tenant’s insurance?

To protect your possessions, as well as your liability. Just because you do not own the home in which you live does not mean you aren’t financially responsible for your actions in it.

Can my landlord force me to get tenant’s insurance?

No, but they can make it a condition of your lease. You can choose to not sign the lease and rent elsewhere in these cases.

How much does tenant’s insurance cost?

The cost varies depending on your coverage, location and so on, but the average across Canada is $23 a month. Some policies start as low as $12.

Can I get tenant’s insurance for a student room?

Absolutely! Cheap policies covering a single room in a multi-tenant dwelling, such as a student residence, is available and easily accessible. This might be a good idea if you have computers, expensive books, bicycles, and so on.

Who regulates tenant’s insurance?

Tenant’s insurance is regulated by the same provincial authorities as home insurance and auto insurance.

Can I get tenant’s insurance if I sublet my place?

You can have tenant’s insurance if you sublet your place, but it won’t cover anything that happens to the home or your stuff while it’s being sublet. You need to be living there for the policy to be effective.

Are there minimal levels of coverage for tenant’s insurance?

No; unlike auto or home insurance, there are no mandated minimal levels of coverage required with tenant’s insurance, so you can truly get minimal policies that cover just the basic necessities. This is also why tenant’s insurance can be so cheap.