If you rent a home, your landlord might ask you to purchase tenant insurance, also known as renters’ insurance. Canadian laws don’t mandate tenant insurance like it does car insurance, but a policy provides coverage in many unfortunate situations you may face as a tenant. This includes scenarios outside of your home, such as a car break-in. Regardless, tenant insurance is valuable to have.
This article explains the benefits of tenant insurance and how it can cover your personal possessions in a car break-in.
The benefits of tenant insurance
Renters’ insurance generally covers tenant in cases of legal liability, personal property loss, and a need for additional accommodations. Below are examples of when renters’ insurance can protect you:
- Legal liability: you leave the stove unattended, and it starts a fire that spreads to the apartment units next door, leaving adjacent units with fire damage. Tenant insurance will cover any legal fees or damage awards if your neighbours sue you for property damage.
- Personal property loss: a break-in occurs, and thieves steal your valuables. Tenant insurance compensates you for the replacement value of your stolen goods.
- Additional accommodations: a flood means your lease unit requires a month of repairs, and you need to find a short-term living accommodation. Tenant insurance can cover the costs of renting a hotel or other short-term accommodations.
Tenant insurance and car break-ins
Most renters’ insurance policies protect your possessions inside and outside of your home. So, suppose you go grocery shopping and leave your phone in the car. If someone smashes your windows and steals your phone, your tenant insurance can pay for a replacement. However, tenant insurance won’t pay for any damage to your car, like the broken window. That’s the responsibility of your car insurer.
In another example, if someone steals your entire car, you can claim the lost possessions in your vehicle (such as a laptop in the trunk) through your renters’ policy. But, again, the policy won’t cover your actual car.
Car break-in coverage via tenant insurance is not guaranteed, however. Some policies may expressly exclude theft outside your home or only cover car break-ins when your vehicle is on your driveway or garage. It’s best to read over your policy and talk to an insurance expert.
Additionally, standard renters’ insurance doesn’t cover identity theft. Suppose someone steals your passport, drivers’ license, or other documents in a car break-in. If you require services such as credit monitoring and face fees in the replacement process, your tenant insurance won’t provide that. Some insurers may offer riders packages to cover identity theft, however.
Personal possession coverage and policy limits
Making a tenant insurance claim after a car break-in won’t allow you to replace everything under the sun. For example, standard tenant policies won’t entirely cover expensive handbags or luxury watches. Each policy has a policy limit — the maximum you can claim if your possessions are stolen, lost, or damaged.
There are also policy limits for specific categories. For example, jewellery usually has a lower policy limit than other possessions, unless you opt otherwise. So, just because your policy limit is $10,000, your tenant insurance may not protect the entirety of your $10,000 necklace or watch.
When you make a claim, you also face a deductible. This is the amount of money you need to pay to make your insurance claim. A deductible can range anywhere between $500 to $3,000 or more. It ultimately depends on what you choose when purchasing a policy. Higher deductibles generally result in a lower monthly premium.
Commonly, tenant insurance excludes coverage to items you use for business. Suppose you own a marketing consultancy practice, and you leave your computer and cellphone in your car (both used for business purposes) and your car’s broken into one day. In that case, your renters’ insurance won’t cover your computer or cellphone replacements unless you had a riders to cover business tools. A small business insurance plan could also protect your business assets when your tenant insurance doesn’t.
Renters’ insurance is a great tool to mitigate the risks of losing your most important assets. Whether you face a home break-in or car break-in, a proper policy provides peace of mind that you won’t have to replace your possessions out-of-pocket.
WRITTEN BY: Adrian Zee
Adrian Zee is a freelance writer and a student at Osgoode Hall Law School. Previously, he studied management and writing at Western University and worked in the data & analytics industry.