Why do I need renters insurance in Canada?


Is renters insurance for me or my landlord?

Renters insurance is for you and your family. As much as everyone wants to have a great relationship with their landlord, the reality is landlords can’t always financially protect you from everything that could go wrong in your home. Your landlord should have an insurance policy covering the building you live in, but that policy doesn’t protect all of your belongings the way renters insurance can.  

How does renters insurance protect me? Why Do I need it?

Renters insurance keeps you from paying a lot of money if something goes wrong in your home, belongings are damaged, or people suffer injuries. Most people don’t have hundreds or thousands of dollars to pay for those losses without going into debt. So insurance helps by charging you a monthly or yearly premium that is usually a fraction of what you would pay if you needed to make a claim.

A note on deductibles:

Every insurance policy has a set deductible. A deductible is the amount of money you pay out of pocket to repair or replace your stuff if you need your insurance company to pay out a claim.

If $2,000 worth of electronics was stolen from your home during a robbery and your insurance deductible is $500, your insurance company will pay you $1,500 to replace your belongings.  

The higher your deductible, the lower your insurance premiums will be, but you’ll receive less money if you make a claim – this is why you need to make sure you could afford to pay your deductible. If you don’t think you could afford to pay $500 towards replacing those stolen electronics, you could adjust your policy to have a lower deductible of $250.

When would I use my renters insurance? 

Renters insurance can help protect your belongings from a range of circumstances like:

  • Fire
  • Theft and vandalism
  • Severe weather like wind or hail storms
  • Water damage

*Always check with your insurer to find out which “perils” your policy’s coverage includes. 

What’s the difference between landlord and renter insurance? 

While your renters insurance covers the belongings in your living space, your landlord should also have a separate insurance policy covering the structure of the building in which you live. Check with your landlord to find out about the details of their insurance coverage.

Not all landlord’s insurance policies include flood insurance, which may be of particular concern if you live in a basement apartment or a low-lying area next to a lake. In addition, not all tenant insurance policies cover floods either, so it’s essential to check if your policy would cover your belongings in the event of flooding from different sources like a sewer backup, heavy rainstorm or overflowing body of water.  

What is legal liability Insurance, and how does it protect me? 

As a renter, you should consider including insurance to cover legal fees if someone injures themselves while visiting your home. Say a guest slips on your freshly cleaned floor. If they decided to sue you for an injury, your liability insurance could help pay legal fees and financial settlements. 

Another example is if an accident in your unit impacts another part of your building. If your bathtub, sink, or toilet overflows and causes water damage or injuries in the apartment below yours, your liability insurance can step in to pay for damages.  

What if I have to move out?

In many cases, your renters home contents insurance travels with your belongings as you move them from one location to your new home. However, it’s critical to check with your insurer before moving to let them know the details of your move and your new address; not doing so could affect your ability to make an insurance claim in the future.

There’s also the possibility that you have to move out because your home needs repairs and is unfit to live in during the repair process. Your renters insurance policy could help you pay for temporary accommodations. Every renter’s policy is unique, so check with your insurance company to see if your policy includes temporary housing coverage for your family.


How do I determine what insurance limits are right for me?

Typically renters base their insurance limits on the value of their belongings. So, if you own higher value items, you’ll need higher coverage limits to ensure you could afford to replace them if they were damaged, destroyed or stolen.

Take an inventory of your family’s belongings. How much would it cost to replace them if everything in your home was damaged? If that amount is $20,000, you likely want a policy that could pay you a maximum of $20,000 if everything you own was lost in a catastrophic event like a fire.

Do you have any precious, valuable belongings, like fine art, heirloom jewellery or high-end tech or sports equipment? Whatever they are, you can “schedule” your most valuable belongings and add them to your insurance policy. Scheduling property means that you have special insurance for a specific item that costs much more than your other possessions.

A couple may only need $10,000 worth of insurance to cover their small apartment’s contents. Still, if they have an engagement ring worth $3,000, it’s wise to get special coverage for this item since its value equals almost 30% of the rest of their belongings combined. 

Did you know that only about half of Canadian renters have renter’s insurance? If you’re new to Canada and already thinking about insuring your belongings, then you’re already ahead of the game! 

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