Renters Insurance 101: What it is and What it Covers

Whether you’re currently scouring apartment listings on Kijiji or have already landed your dream pad, insurance is an important part of the rental process. Renters insurance will protect your things, and yourself, from the financial fallout of an unexpected situation. Even if you’re sold on the importance of renters insurance, you probably have a lot of questions — and that’s great. In this blog post, we’ll answer everything you need to know in order to choose the right policy for your lifestyle.

What is Renters Insurance?

Renters insurance protects everything you own within your rented space from nasty surprises, like damage resulting from kitchen fires, blown water pipes, and break-and-enters. It also protects you from liability if, for example, you accidentally started that kitchen fire and your whole apartment block gets damaged. Because liability coverage goes where you go, you’re covered if someone gets injured at your place or if you break something at a friend’s home.

Renters insurance saves you from financial trouble if unforeseen and unfortunate situations happen.

Why You Need Renters Insurance

Peace of mind is the biggie here. Even though you’re paying rent, your possessions aren’t covered by your landlord’s insurance — meaning you could be stuck replacing everything you own in a worst-case scenario. Renters insurance takes away that burden and helps you land on your feet after a mishap.

It also protects the people and animals that share your space. Living with a roommate or pet can be a great experience, especially if you have third party liability coverage. Without it, you could be the one paying for expensive repairs or legal fees if your housemate forgets to blow out their candles or your furry friend forgets their manners.

Renters insurance also comes in handy if you make any improvements to your suite or have any valuable electronics (students take note!). Adding shelves or changing your dining room light fixture might seem like minor renovation projects, but it’s still an investment in your space. Smartphones, tablets, and laptops: many of us have one or two of these pricey devices and the cost of replacing them adds up quickly.

The bottom line is, renters insurance lets you protect your belongings, pets and investments in the case of fire, theft or damage.

How Renters Insurance Works

There are two main components to renters insurance: contents and third party liability coverage. The first protects your stuff and covers the cost of replacing it after an incident. The second helps cover legal fees you might incur if you’re found responsible for injuries or damages at your home or someone else’s.

For a small annual or monthly premium, your renter’s insurance policy protects your belongings and the structure of your space and neighbouring spaces from things like theft, hail, water damage, and fire. Your renter’s insurance will also cover your living expenses if you need to vacate your rented space for a period of time. Staying at a hotel, even for a few nights, can be costly if you’re paying out of pocket.

All of these coverage options vary depending on the kind of space you’re renting — whether it’s an apartment, home or condominium — and the kind of policy you choose.

What happens if you don’t have renters insurance?

You won’t notice how valuable and important insurance is until you need it. It’s easy to assume that nothing bad will ever happen to you or your home, but the truth is that there’s a lot of things that are out of your control.

Even if you live in a quiet neighbourhood and lock your doors religiously, break-and-enters still happen. Without insurance, you won’t be reimbursed for the big screen TV, sports equipment, camera or furniture that might get swiped. Paying to replace all that stuff could mean saying goodbye to the trip you were saving for, or the once-in-a-lifetime concert you were planning to attend.

Without a policy, you’ll be stuck footing the bill for any personal belongings that get damaged during a fire or natural disaster. If the damage is so bad that major repairs are needed, you’ll be paying the full cost of staying in a hotel.

Worse still, you could be found responsible for an accident that causes significant damage to your suite or the whole building. Factor in legal fees and repairs, and you could be on the hook for thousands of dollars and a debt that follows you for life.

Renting without insurance is an unnecessary and costly risk.

Renters Insurance FAQs

1. How much does renters insurance cost?

   Renters insurance won’t break the bank. Your monthly or annual premium depends on a few different factors, including the kind of property you’re renting and the kind of coverage you choose. A typical policy costs as little as $240 per year, a figure that works out to as little as $20 per month for coverage that ranges from $30,000 to $100,000 in contents coverage and $1 million to $2 million in liability coverage.

2. How much renters insurance do I need?

   This depends on things like your net worth, the value of your property, and how much risk you can handle. You should purchase enough insurance to cover the full amount of your personal property, including clothes, electronics, kitchenware, and furniture. You need enough coverage to get you back to your current lifestyle after an incident. If you have any special or expensive things — like your great-grandma’s wedding ring or your custom stereo setup — you will want to add a “floater” to cover the increased value above the policy limit.

3. What does renters insurance cover?

   Renters insurance covers damage or loss from unfortunate events like theft, vandalism, lightning, wind, hail, water damage, explosions and fire. If you’re displaced from your home following an unfortunate event, your policy will pay your living expenses up to a certain amount. Your policy also provides third-party liability coverage at home and away.

4. Can roommates share renters insurance?

   Generally, it’s a good idea to get your own policy. Even the best roommates part ways eventually and things can get complicated if you or your roommate needs to get out of their lease to go backpacking for a year or take a job out of province. Also, if you have your own policy, you won’t be responsible for paying higher insurance premiums should your roommate make a claim that has nothing to do with you or your stuff.

5. What do I need to apply for renters insurance?

   First, determine how valuable your possessions are, particularly when it comes to big ticket items like your TV, computer, bicycle, smartphone and even the food in the fridge. Next, you want to find the policy that fits your budget and your lifestyle.

Now that you know why renters insurance is important and what kind of coverage is available, you can feel confident when it’s time to choose your policy. Doing the research is the hard part, getting the right policy is easy with Westland. Contact us to talk to one of our trusted advisors, or to get a quote, click here to get started now.