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If you’re asking yourself “what is tenant insurance, how does it work, and do I need it?” then we have the answers for you. Our guide explains exactly what this type of insurance is, how its coverage works, and if it’s mandatory.
We’ve given you all the key information you need to have a clear understanding of tenant insurance. All you have to do is read our guide and decide if you can benefit from taking out this type of insurance coverage.
Tenant insurance provides cover for renters, protecting them against the cost of repairing or replacing their possessions or a landlord’s property, if they are legally responsible. Investing in this cover offers peace of mind to both tenants and landlords.
Tenant insurance is also known as renters insurance and offers some of the same protections as homeowners’ insurance (home insurance), with some key exceptions.
The key homeowners’ insurance benefits that are exempt from tenant insurance are cover for the cost of repairs to the structure or dwelling.
Tenant insurance isn’t the same as landlord’s insurance. The former is taken out by renters, while the latter is taken out by landlords.
What does a tenant insurance policy cover?
Tenant insurance cover protects renters against the following three types of repairs or replacements they may require or otherwise be liable for:
Personal liability insurance coverage
Personal liability covers situations where a tenant is responsible for accidental damage or injury to someone or their property. Just to note – your tenant insurance policy is only designed to cover you, any roommates will need to purchase their own policy.
Extra living expenses insurance coverage
Extra living expenses insurance covers occasions where tenants are forced to stay in alternative accommodation, like when repairs are being conducted, after an insured loss. It pays for the cost of the alternative residence, so tenants can still meet their rental obligations at their permanent address.
Contents insurance coverage
Contents insurance covers situations where a renter’s personal belongings are damaged or stolen. It covers the replacement cost or price of repairs for a renter’s property.
What do I get with my coverage?
Tenant insurance protects renters against unforeseen expenses. At a minimum, the insurance policy provides these three types of coverage:
- Personal liability
- Additional living expenses
These are broad categories of tenant insurance coverage that don’t explain the specific instances renters are covered against. Here are some situations your tenant insurance policy may cover:
- Accidentally injuring someone
- Break-ins and theft
- Water damage
- Accidental damage
- Damaged rental property
- Identity fraud
Why do you need tenant insurance?
Tenant insurance provides peace of mind and protection to both renters and landlords. It isn’t mandatory in Canada but many landlords make it a requirement of their tenancy agreements, meaning that renters need to get tenant insurance to secure their home.
While tenant insurance isn’t a legal requirement, you could benefit from tenant insurance as a renter because not having it could be so costly.
The reality is you might not be able to find the money to pay for emergency accommodation, property damage or replacing stolen items. Tenant insurance can be bought for as little as $12 per month, while you might have to pay thousands of dollars in repairs or replacements.
Ultimately, whether you need tenant insurance will come down to you or your landlord. But ask yourself this: “Do I need the stress of worrying about paying thousands of dollars to pay for unforeseen circumstances?” If the answer is no then you should consider tenant insurance.
What are the pros and cons of tenant insurance?
Tenant insurance is something many landlords and/or property managers insist upon as part of the agreement you sign up to when renting a property. Even if it’s not mandatory, it can be sensible to get this cover.
As with all insurance cover, there are both pros and cons to taking out renters insurance. These are the key pros and cons to taking out tenant insurance:
Pros of taking out tenant insurance
- Your belongings are protected
- Your assets are protected
Cons of taking out tenant insurance
- It’s an extra monthly expense
- It might have a high deductible
You should read the terms and conditions (T&Cs) of any tenant insurance policy before you sign up for it. The policy wording will outline exactly what you’re covered for, giving you the information you need to decide if the pros outweigh the cons.
How much will an insurance company cover me for?
Different tenant insurance companies offer different levels of cover. How much cover you can get depends on the provider you use and the level of protection you require.
To get an idea of how much cover you could get, below are the amounts of coverage offered by Duuo:
- Personal liability limit: up to $2 million.
- Contents cover limit: up to $100K.
Do students need tenant insurance?
Tenant insurance isn’t mandatory for students unless it’s a condition of a rental lease agreement. This means many students will see renters insurance as an unnecessary expense, especially when it results in them having less money to use for the things they enjoy. But this can be a costly mindset to take.
It’s fair to say that a student rental unit or house isn’t always the most serene or stable environment. Living with lots of people can lead to tensions, mistakes and parties. All of these situations might result in damage to property, both your own and other people’s.
If you accidentally damage someone else’s property or they mistreat yours, there are two outcomes: someone goes without their property or someone pays to repair or replace it.
Neither outcome is ideal but if there is a cost for repairs or replacements then it could cost thousands of dollars.
Tenant insurance can cost as little as $12 a month.
When you compare the cost of renters insurance to the price of replacing someone else’s property, it’s fair to say students could benefit from tenant insurance rather than receiving a bill that sets them back thousands of dollars.
How much does tenant insurance cost?
Tenant insurance can cost just $12 a month, which sets you back $144 a year. Some basic packages can cost up to $20 a month, which totals $240 over the course of a year.
The price of your tenant insurance depends on the level of cover you need. You can find out how much renters insurance will cost you by getting an online quote from a respected provider.
How do I make a tenant insurance claim?
The precise claims process for tenant insurance depends on the provider you’ve taken out your policy with. However, regardless of the provider you’ve selected, you’ll need to contact the insurance company and provide all the necessary details to support your claim.
Many insurance providers allow you to make a claim online or via phone. Some providers, like Duuo, offer a chatbot service to guide you through the process of submitting a claim.
Duuo’s chatbot asks you a few questions and then puts you in touch with a human claims adjuster. Your claims adjuster will let you know exactly how to make a claim, from the information you need to submit to any deductible you might have to pay.
The deductible is an important part of a tenant insurance claim. This is the amount of money you have to pay yourself and it’s deducted from the total value of the claim.
Duuo Tenant Insurance doesn’t require you to pay deductible for personal liability claims. There’s a $1,000 deductible for property claims. For example, this is how the deductible works for a $10,000 claim:
- Duuo pays $9,000
- You pay $1,000
Is tenant insurance mandatory in Canada?
Tenant insurance isn’t mandatory in Canada. However, many landlords require renters to take out this cover, which means lots of people have to take out tenant insurance.
Can a landlord make tenant insurance a requirement?
Landlords can require tenant insurance and many of them do make this requirement of their renters.
Is tenant insurance the same as renters insurance?
Tenant insurance is the same as renters insurance. Each of these terms is a name for a policy that provides three types of cover for a renter’s insurance needs: personal liability, additional living expenses, and contents.
Is tenant insurance necessary?
Tenant insurance is necessary if your landlord requires it as part of the tenancy agreement they ask you to sign for a property.
What are the 3 things tenants insurance covers?
The three things tenant insurance covers are personal liability, additional living expenses, and contents. Personal liability covers your responsibility for accidental damage or injury to someone else or their property. Additional living expenses covers the cost of reasonable emergency accommodations, after an insured loss, if your home is uninhabitable. Contents covers damage to a renter’s own property.
Does landlord insurance cover damage by tenants?
Landlord insurance is a policy taken out by people letting properties to renters to cover contents they own on the premises. This insurance can be taken out by landlords and it covers damage to the property they own, such as the building and their contents. Landlord insurance doesn’t cover damage to tenants’ property.
Does renters insurance cover damage to landlord’s property?
Renters insurance covers tenants against the cost of damage, repairs, theft, and legal liability. It doesn’t cover the cost of addressing issues with the dwelling or structure of the rental property. However, if a renter is held responsible for damaging the property they are renting, there is also limited coverage for paying such losses. Property managers or landlords can take out property management insurance to protect themselves and their assets. Property management insurance provides cover against damage, bodily harm and a range of other things. It’s still advisable for property managers to get their renters to take out tenant insurance, so there’s as much cover in place as possible.