As a renter, you have a big benefit that homeowners don't have. When a major appliance is broken, when the building needs maintenance, or when you have nearly any issue, you get to call someone else to deal with it. Even better, the landlord is the one who pays for the repair or replacement. Many people assume that since the landlord is fully responsible for the building that they will also bear responsibility for safeguarding the belongings of the renter. However, that is not the case. While your landlord probably has a homeowners policy that covers their own property, that policy will not cover your property. Read on to learn more about why you need renters coverage.
A homeowners insurance policy in Canada typically covers three different general areas:
- Liability: This type of coverage provides for other people, paying their damages when they are injured on the homeowner's property.
- Building: This coverage applies to the structure of the home or apartment building. If the building or property is damaged in a significant way, this coverage pays for repair.
- Personal Possessions: The personal possessions inside the home are covered by this part of the homeowners policy. This includes virtually everything in the home, from furniture to jewelry.
It is important to note that the personal possessions coverage in a homeowners policy applies only to anything owned by the homeowners themselves. The distinction may seem a bit confusing in some circumstances, for example if you rent a home that is partially furnished.
There could be a situation where the couch and coffee table would be covered in the landlord's homeowners insurance policy since they own those things. However, the decorative objects sitting on that same coffee table would not be covered if they belong to you, the renter. Protecting your possessions is your responsibility as the tenant.
Your renters insurance will cover everything that you keep in your rented home, although it may have some restrictions on the amount of total coverage for certain things. Generally, you can only get a small amount of compensation for the loss of cash, for example.
Your renters coverage will cover loss or damage that occurs because of theft, natural disasters, vandalism, and most other things that you have no control over. If any types of damage or loss are excluded, these will be expressly stated in your policy.
Renters insurance coverage is usually sold in lump-sum amounts. For example, your insurance agent may offer renters coverage in $25,000, $50,000, and $100,000 increments. The best way to determine how much coverage to buy is to give your insurance agent a list of all the major possessions that you keep in your rented home, along with a rough valuation for each thing.
Don't allow yourself to rely on a homeowners policy that is only there to protect the landlord. You can get your own protection in the form of a renters policy today!