Team at InsureBC. Writing things about insurance tips and tricks.
If you’re on the right side of the 40% of all renters who actually purchase renters insurance, you’ve got some peace of mind that you’ve made a solid decision. After all, renters insurance is a must for just about anyone who rents. What most renters continue to forget is that your landlord’s insurance policy will not actually cover your personal liability, personal possessions or put a roof over your head if your apartment or condo becomes unlivable. While renters (aka tenants) insurance is not overly complicated to understand, it is important to know exactly what you’re covered for and when the coverage will kick in. So let’s have a quick look at the 3 main elements of a tenants package:
1. Contents Coverage
This is likely the easiest one to explain. When you buy your renters insurance policy, your broker will ask you to pick your coverage limit. This limit represents the amount of coverage you have for your personal possessions, should something happen that causes you to lose everything. Often times, insurance companies set a minimum amount of coverage (usually $25,000) for personal contents.
2. Additional Living Expenses
This coverage pays, in specific circumstances, for any necessary expenses incurred while your apartment is being repaired and may be unlivable as a result. These costs may include hotel bills, restaurant meals, and moving costs. So simply put, this coverage pays for unexpected expenses when you cannot live in your apartment due to a covered loss.
3. Renters Liability Insurance
Sometimes a bit more complicated to grasp, this coverage protects you financially if you unintentionally cause bodily injury or property damage to others while inside the building in which you live or anywhere in the world.
Because the last element is often the most difficult one the understand, let’s take a closer look at renters liability insurance coverage. If it hasn’t happened to you personally yet, surely you have had any of the below examples happen to someone close to you, be it a family member, friend or even a friend-of-a-friend:
- Your toaster catches fire, damaging not only your unit but also part of your neighbor’s place.
- Your housekeeper slips and falls on your kitchen floor and injures herself.
- While on holidays, you throw a baseball on the beach and you accidentally hot a bystander in the head.
In each of these cases, your renters personal liability insurance coverage helps protect you whether someone sues you or not.
To simplify things even further, for those in a rental property, i.e. apartment renters, your renters policy includes liability insurance which covers you for property damage or personal injury you unintentionally cause even if you are not legally liable. If someone then does sue you due to injury or property damage covered by your policy, even the defense costs associated with it are typically covered by your policy.
One important question to ask yourself is whether there are significant differences in the various renters policies with regards to the liability insurance component, and if so, whether it’s worth doing a renters liability insurance comparison.
While you have the option to select the amount of liability coverage you would like to have, the typical amount is $2 million, with $1 million usually being the minimum. The way in which insurers differ with regards to their liability coverage is in the way they determine liability. An important element of that determination would be how a claims department evaluates each occurrence and whether negligence on the part of the tenant played a role in the loss.
As is so often the case, an insurance policy is only as good as the claims service that backs it. When confronted with a covered loss, you will quickly see the value of an insurance company in the manner in which they respond to your claim.
You can rest assured that at InsureBC, we have only partnered with leading Canadian insurance companies, who are known for their superior claims service. We want to ensure you are well looked after, in the event of a loss. Our licensed insurance advisors are here to answer any questions you may have regarding your renters insurance policy or the claims service offered by our Insurance Company partners.
Originally published April 22, 2018, updated March 9, 2020