4 Things Every Renter Needs to Know About Tenants Insurance
Buying tenants insurance to protect your stuff may seem like an unnecessary expense, until you experience a theft or fire in your rented home or apartment and lose some of your most treasured possessions forever.
Whether you're a longtime renter or starting out in your first place, tenants insurance policies provide important benefits and coverage. If a fire or similar incident destroyed your home and you didn't have tenants coverage, it would be up to you to replace everything you own. Plus, if someone claimed you caused an injury or property damage, without adequate insurance protection, you could be at risk for an expensive lawsuit and paying that person for his or her damages1.
As you consider whether to buy tenants insurance, here are four things you need to know:
1. Tenants Insurance Provides Off-Premises Coverage
Tenants insurance does more than cover the cost of lost or damaged possessions in your home. In most cases, there is coverage if your bicycle is stolen from a bike rack at the park, or if your laptop is taken from your car while you're at the supermarket.
2. You Can Be Compensated if You're Forced to Relocate
Most tenants policies provide additional living expenses coverage if your home becomes uninhabitable due to an event such as vandalism, theft, fire or water damage or if you need to leave your home because of an evacuation order. This benefit usually includes the cost-of-living expenses, up to your policy limits.
This coverage typically is limited to 20 percent of your insured personal property. For example, if your belongings were insured for $100,000, the limit on additional living expenses would likely be $20,000, as outlined in your policy.
3. A Home Inventory Can Determine How Much Coverage You Need
Before you decide how much coverage you need, it's important to know how much it would cost to replace your possessions. You can calculate replacement costs by conducting a home inventory and checking with your insurance representative to make certain you have coverage for your needs.
4. You Can Reduce Your Tenants Insurance Costs
There are a variety of ways to reduce the cost of tenants insurance. An option is to select a higher policy deductible, the amount you must pay before your insurance coverage takes effect. Increasing a deductible from $200 to $500 could create a significant annual savings.
You also may want to consider buying all your insurance policies from one carrier. For example, when you bundle your auto and tenants’ policies from Travelers Canada, you receive additional savings.
1 Insurance Bureau of Canada