Tenant Insurance: Protect Property and Liability
Tenant insurance covers your property and your liability toward the landlord and neighbours, not just the dwelling.
In this article
People often turn down tenant insurance because of a bad calculation: second-hand furniture seems worth little, so the coverage seems unnecessary. A careful inventory gives a different answer. Computer, bike, clothes, instruments and kitchenware almost always add up to more than ten thousand dollars, and replacement is paid at new prices. Belongings are also only half the contract. The liability section covers damage you cause to others: a fire or water leak that starts in your unit makes you liable to the landlord and the neighbours, for amounts that can reach hundreds of thousands of dollars. It costs a few dollars a month. After a covered loss, additional living expenses come on top, meaning the hotel and meals while the unit is repaired. This article redoes the valuation of belongings, explains the contract's three sections and shows how to build, in one hour, the proof that will speed up any future claim.
Redo the belongings' valuation
People almost always decline tenant insurance because they underestimate their belongings. Used furniture seems worth little, so the coverage seems unnecessary. A careful inventory changes the verdict: computer and phone, bike, four seasons of clothing, instruments, dishes and small appliances add up to more than ten thousand dollars in most dwellings. Replacement is paid at new prices, not garage-sale prices. Do the exercise item by item, once, then compare the total to the real cost of the policy, often twenty to thirty dollars a month for the full set of protections. Real value against real premium: that calculation settles most of the hesitation.
Take the measure of the liability section
The most important section of a tenant policy is also the least understood: civil liability. A kitchen fire or a water leak that starts in your unit makes you liable to the landlord for the building and to the neighbours for their belongings and relocation. In a multi-unit building, those amounts reach hundreds of thousands of dollars. Without a policy, those claims go after your assets and your future income. The standard coverage, often two million, is only a small share of the total premium. Depending on the contract's terms, it also covers liability away from home. So the policy does not mainly protect your used furniture. It protects the rest of your finances against a domestic accident.
Count the living expenses after a loss
A covered loss that makes the dwelling uninhabitable triggers the third section: additional living expenses. The hotel, meals above your usual cost and temporary housing during repairs are reimbursed within the set limits. Without a policy, you pay for those weeks yourself, and repairs move at the pace of the landlord and his insurer, over whom you have no leverage. Read this section's limits and conditions in advance: ceilings per period and proof requirements. Keep receipts from the first night. For a tenant, this is often the section that gets used first, because building losses displace more tenants than they ruin.
Build the proof in one hour
Once the policy is signed, prepare the proof. Film the dwelling with commentary, closets open. Photograph the serial numbers and the receipts for important items. Store everything outside the dwelling, online. That hour of inventory will speed up any future claim, since it is up to you to prove what existed. While you are at it, check the declaration in the contract: the real occupants should be named and any roommate situation declared. Each roommate needs their own policy, because yours covers neither their belongings nor their liability. Finally, the policy follows your life. A move, a new cohabitation or a significant purchase should be reported. A policy that describes a dwelling you no longer live in protects the new one poorly.
Quebec scenario
An engineering student in Trois-Rivières thinks tenant insurance is pointless: his second-hand furniture is barely worth $3,000, he figures. Then a forgotten pot on the stove one floor up starts a fire. The building is evacuated for three weeks, and he realizes two things. His mental inventory was wrong: computer, bike, instruments, clothes and kitchenware add up to more than $14,000. And the firefighting water that came through his ceiling is nothing compared to the reverse scenario. Had the fire started in his unit, his liability toward the landlord and the neighbours could have reached hundreds of thousands of dollars, which is exactly what the liability section of a tenant policy covers. His insured roommate gets the hotel and extra meals reimbursed, while he pays everything out of pocket. The following week he buys a policy at $24 a month with two million in liability, then builds his inventory in an hour of photos. Proof of value gets prepared before the loss, never after.
Checklist
- Redo the honest inventory of belongings
- Count replacement at new prices
- Check the liability limit offered
- Understand the covered relocation costs
- Compare two or three quotes
- Photograph your belongings in one hour
- Keep the proof outside the dwelling
- Declare roommates and occupants correctly
- Update after every move
The questions we get
A question about your situation?
A Quebec broker answers, with no commitment.
Read next
// Insurance
Condo Insurance: Separate the Syndicate Policy From Yours
Find where the syndicate’s policy stops so you insure your own improvements and the property inside your unit.
// Insurance
Renovations: When to Notify Your Home Insurer
Report the nature, cost and duration of the work to your insurer, especially if the home will be unoccupied during construction.
// Insurance
Home Insurance: Build a Property Inventory
Photograph each room, record serial numbers and keep receipts for important property before a loss occurs.