Do I really need tenant insurance? What would happen if I just went without it? Is it even mandatory anyway?
These are the types of questions on the minds of many renters in Canada. It’s a natural line of questioning, particularly if you’re not yet familiar with what tenant insurance is meant to do for you. In this case, it might seem like just another expense to add to your monthly budget, alongside rent, utilities, and other essential living costs.
In this article, you’ll learn about the legal requirements of tenant insurance in Canada, as well as the potential risks you assume if you choose to live without it. Let’s begin.
Is Tenant Insurance Mandatory In Canada?
No, it is not mandatory by law in Canada. That doesn’t mean it’s not highly recommended, it just means that you are not legally required to have it.
Also, remember that it’s common for landlords and property management companies across Canada to incorporate tenant insurance as a requisite within the lease agreement terms that you consent to upon signing. According to Settlement.org, what this means (at least for those living in Ontario), is that “if you agreed to get tenant insurance as part of your lease agreement and then you don’t do it, your landlord could give you a notice to terminate the tenancy and then file an application with the LTB to evict you.”
What Happens If You Don’t Have Tenant Insurance?
You might not think it’s a big deal to live without tenant insurance. After all, if the worst were to happen, like a fire or break-in, your landlord’s insurance would protect you, your unit, and your belongings, right?
Wrong. Your landlord’s insurance policy only covers damages to the physical structure of the rental unit, including its permanent fixtures, as well as common areas such as lobbies or elevators. In other words, landlord insurance doesn’t cover:
- The cost to replace or repair your personal belongings (ex. furniture, electronics, clothing, musical instruments, etc.)
- The cost to temporarily relocate if your rental becomes uninhabitable due to an event such as a fire (ex. hotel, short-term rental)
- The legal and medical costs associated with an accident or injury that happens in your unit that you’re deemed responsible for
This is where tenant insurance comes in. It effectively fills the gaps left by landlord insurance, offering coverage for your personal belongings, liability, additional living expenses, and possibly more depending on your policy and insurer. With tenant insurance in place, you’re ensuring you do not have to bear the financial burden of related expenses, such as those incurred due to a fire or break-in, which could amount to hundreds or even thousands of dollars out of your own pocket.
Still not entirely convinced? Here’s a look at what else can happen if you don’t have tenant insurance as a renter in Canada.
- You’ll potentially have fewer rental units to choose from
- You’ll have to pay to replace or repair any lost or damaged personal belongings
- You’ll be liable for accidents that happen in your rental unit
- You’ll be financially responsible for any additional living expenses
- You’ll be at risk of greater stress and financial strain
Limited Options
If you don’t have tenant insurance, your selection of rental units may be restricted, as some landlords and property management companies may refuse to lease to you without it.
Responsible for Replacing Personal Belongings
Have you ever used a contents calculator to find out how much it would cost you to replace all your belongings if you lost them suddenly tomorrow? If you haven’t, try it sometime. You might be surprised by the substantial sum you’d need, which could otherwise be spared if you just had tenant insurance to cover such expenses.
Liability Risk
If you don’t have tenant insurance, you’re liable for accidents that happen in your unit which could potentially result in legal and financial repercussions beyond your means.
Additional Living Expenses Paid Out of Pocket
Accidents happen, especially in rental units or buildings that are shared by multiple people. In such environments, the risk of an accident occurring, rendering your apartment uninhabitable without any fault on your part, is heightened. If this were to happen and you were caught without tenant insurance, you would be on the hook for any temporary housing costs.
Undue Stress and Financial Strain
Overall, the absence of tenant insurance can cause you greater stress and financial strain in the case of unexpected events or liabilities. This is especially unfortunate given that for as little as $12 a month, you can protect yourself from such hardship with YouSet.
Next Steps: Tenant Insurance Starting at $12/Month
Tenant insurance is highly recommended for anyone who’s going to be renting their living space. While you may think of yourself as a responsible and careful tenant, accidents happen to the best of us. Even the most prepared tenant can’t foresee a burglary, or someone injuring themselves in their home, or a fire in the building that happens to destroy your belongings in the process. As the old saying goes – better safe than sorry.
Thankfully, you can enjoy the peace of mind that tenant insurance provides without breaking the bank. With YouSet, tenant insurance starts at just $12 a month, making it both affordable and invaluable for renters.