When you rent your first apartment, basement suite, or you are moving into a college dorm. You may be asked to provide a copy of your renters insurance policy, also known as “Tenant Insurance.” You may think this isn’t worth the money, but we are here to tell you why it is important and the value in having this insurance in place.
What does a tenant/renters insurance policy cover?
- Belongings – While your landlord is responsible for the building, you are responsible for your belongings inside (and outside). So if your suite burns down or there is a water pipe rupture in the suite above you which floods your apartment. This policy will provide coverage for your damaged furniture, computers, clothes, tv, etc. Our policies offer comprehensive coverage for your belongings. This means it covers the basic named perils, such as: Fire, Smoke, Wind, Hail, Theft, Transportation, etc., and it also covers accidental damages, for example, you drop your brand new 4k TV in the staircase moving it up to your suite. There goes $4000. Or you lose your fiancé’s engagement ring, these would be covered on your comprehensive policy (subject to your deductible).
Sewer Backup – this is an additional coverage that is baked into our policies. If you desire, you can remove this coverage or change the limit, however, if your toilet backs up or you have a sewer drain in your basement that backs up and destroys your belongings, you will not be covered for the loss without this additional coverage.
- Liability – This is the most important part of a tenant policy. If you are negligent and cause bodily injury to someone or damage to someone’s property, you can be held financially responsible for those damages. (ie. You leave the coffee pot on, and it burns the house down). The landlords policy will pay for the burnt down house, but their insurance carrier may subrogate against you, for being negligent. This financial loss can be even greater if you live in a multi-unit complex. (ie. Apartment, Condo).
(Subrogate means that the insurer has the legal right to claim the insured property after it has paid the compensation of the loss.)
Most renters insurance policies have $1 million liability included in the policy. We recommend increasing that to at least $2 million for a minimal premium increase ($1/month), as a million dollars does not go very far nowadays.
- Betterments and Improvements – If you have lived in a suite for a while, or you have moved into an older unit. You might take it upon yourself to make some upgrades or renovations to your place. Upgrading the kitchen cabinets or countertops, the bathroom, or you redo the flooring. If you’ve made these improvements, you need to insure those extra costs.
The landlord is only responsible to insure the building to the way it was originally built. If they installed cheap linoleum and basic cabinets, and the unit burns down. That is what the unit will be rebuilt with. However. you’ve upgraded that suite and put $5-10,000 into those betterments, without a tenant policy, you may not be covered for those upgrades. With our renters insurance policy, you get 10% of your belongings limit automatically included in your tenant policy to cover these betterments and improvements. If you need to increase this limit, please call us and we can get that added.
- Additional Living Expenses – another important coverage. If there is an insured loss in your building where you have to be removed from the premises because it is unsafe or unlivable during the repairs. You will need to find and rent another place until your suite is safe to return. During those weeks/months, you will be paying additional rent for that time. This coverage is there to pay for any additional living expenses during the claim. Our renters insurance policy automatically includes coverage, up to 20% of your belongings limit. (For example, if you have a $30,000 tenant pak, you would have $6,000 of additional living expenses).
- Legal Expense Coverage – Protect your legal rights. With our renters policy (with SGI Canada) you will receive access to a FREE Legal Advice Helpline. If the situation is in your policy, you will receive $50,000 coverage of legal support.
- Identity Theft Coverage – If your identity is stolen and you have unfortunate costs incurred trying to retrieve it. Our policy offers up to $15,000 coverage automatically, for these situations.
When should you buy a policy like this?
Basically, when you are no longer considered a dependent to your parents. Up until then, their insurance policy will insure your belongings (even away from home). Most insurance companies state this occurs at age 18 or age 25 (if you are a full-time student). However, if you live away from their home (as a student), you will have minimal coverage extended from your parents home insurance policy. Therefore, we always recommend carrying a renters insurance policy for yourself. The other benefit, is if you do end up having an insurance claim, it doesn’t affect teh rate or claims experience of your parents home insurance.
Same rule applies, if you are a senior moving out of your home and into a care home or “seniors centre.” Your children’s home insurance will cover your belongings while living in these homes, but again, the coverage is minimal. Important – Do not rely on other people’s insurance to cover you, because if their policy lapses or is cancelled for some reason, you will be without insurance.
“So how much is this going to cost me?”
Renters insurance is relatively inexpensive. Depending on the limits you select, the location and your insurance loss history, your premium can be under $20 per month. For this price we offer comprehensive coverage on your belongings with a minimum $30,000 limit. The reason we start with this amount of coverage is we want all of our customers to have the best coverage possible. Our job is to make sure our customers are safe and secure for when a claim arises.
At Mello Insurance, we understand the frustrations about buying insurance, however, we also have seen horrific claim outcomes, without insurance. Therefore, we have created a renters insurance product that is simple & cost effective for every consumer.