Renters’ insurance (also known as tenants or rental insurance) is just a nice plus for many. In reality, it’s an essential asset that safeguards your belongings, provides liability protection, offers coverage for temporary living expenses, and ensures that you are financially prepared for unexpected events. We will cover renters’ insurance and what it covers to help you understand and use the policy correctly.
What’s Renters’ Insurance?
Renters’ insurance is a policy designed to provide financial protection to individuals renting or leasing a residential property. While landlord’s insurance covers the property’s structure and in-unit appliances, rental insurance protects the renters’ personal belongings and certain liabilities.
In Alberta, tenant insurance is not mandatory to rent out a property. However, landlords can request proof of insurance as a condition for the lease agreement, and overall, it’s a prudent financial decision to mitigate potential risks with generally affordable policies, with prices ranging from $15 to $30.
What Does Renters’ Insurance Cover?
Policy coverage may vary according to your insurance company and your specific needs, but there are some key items most policies cover:
- Personal property coverage: This protects the tenant’s personal belongings, such as furniture, clothing, electronics and other valuables, against perils like fire, theft, vandalism, and certain natural disasters. The insurance company will reimburse the renter for the cost of repairing or replacing these items.
- Liability: with renters’ insurance, you’re protected if you’re found liable for causing damage to the property or if someone is injured while visiting the premises. It covers legal expenses, medical bills, and property repairs for which the tenant is liable. It’s important to mention that most renters’ insurance policies cover liability for damage to your property and your neighbour’s property.
- Additional living expenses (ALE): If you can’t occupy your rental home due to a covered event, like fire, flood or storm damage, ALE coverage helps tenants pay for temporary living expenses, such as hotel bills or rental costs.
How to Use Your Renters’ Insurance Wisely
Getting the most out of your renters’ insurance is quite easy. Here are some pro tips on how to use renters insurance wisely:
- Take inventory of your belongings: Before buying a policy, take the time to create a comprehensive inventory of your personal belongings. Document their value, and consider taking photos or videos of high-value items and name them in your policy. Attention to detail can be invaluable when filing a claim.
- Choose adequate coverage: following the tip above, don’t underestimate the value of your belongings and pick coverage limits that adequately protect their value. Remember that the goal is to have enough coverage to replace your personal property in case of a covered loss.
- Understand the policy: Read your renters’ insurance policy carefully. Understand the coverage limits, conditions, exclusions and any fine print. If you have questions, don’t hesitate to contact your insurance provider for clarification.
- Don’t overlook deductibles: Know the amount you have to pay before the insurance coverage kicks in. Adjust your budget and choose a deductible that makes sense for you.
- Document damage and losses: In the case of a covered loss, document the damage or losses thoroughly. Take photos, keep receipts, and provide a detailed account when filing a claim.
- Bundle Policies: consider bundling your tenants insurance with other insurance policies, such as car insurance. Bundling can often result in discounts, making your overall insurance costs more affordable.
- Update your coverage when needed: Reassess your coverage needs regularly. If you get new valuable items or your living situation changes, update your policy to ensure you’re fully protected.
Rent Safely
Renters’ insurance is a practical and wise decision for tenants to protect themselves. You and your family will have comprehensive coverage for personal belongings, liability protection, ensure a place to stay in case of an emergency, and a peace of mind that is priceless.
