Tenant insurance in Ontario

Tenant insurance defined

Tenant insurance, which may also be referred to as renters insurance, is a type of home insurance designed with renters in mind. It is similar to a homeowner’s insurance policy but without dwelling coverage. Dwelling coverage is found in landlord insurance policies, which is why it isn’t included in tenant insurance policies. Because tenants do not own the dwelling it is not necessary for tenants to purchase coverage for the dwelling. So what types of coverage are found in tenant insurance policies, you may be wondering? Basic renters insurance plans in Ontario typically include the following three coverages: liability insurance, contents insurance, and additional living expenses insurance. With these three types of insurance coverage in your arsenal, you, your rented home, and the belongings inside of it can be protected.

Is tenant insurance mandatory in Ontario?

At this point, you might be wondering, “Do I need renters insurance?” The reality is that, while you are under no legal obligation to purchase tenant insurance,, the provincial government of Ontario does not mandate it. However, you may still be required to purchase it in accordance with your lease agreement. Many landlords include clauses that require tenants to purchase tenant insurance policies and to maintain coverage for the duration of their lease. However, even if your lease agreement doesn’t require it, purchasing renters insurance coverage is still a smart move. Even if your landlord has their own property insurance policy, it won’t cover many of the risks that tenants face. Generally speaking, landlord insurance solely exists to financially protect landlords from risks like property damage to the building or a tenant liability claim. If a liability claim is brought against you, the tenant, or your personal belongings are damaged or stolen, landlord insurance will do nothing to cover you. Contact BrokerLink to learn more about the differences between landlord and renters insurance.

Tenant insurance coverage in Ontario

As a renter in Ontario, it is important to not only understand the importance of tenant insurance but also the ways in which tenant insurance can protect you. To provide further insight into how tenant insurance works, we have put together the following list of tenant insurance coverages. You can also check out BrokerLink’s tenant insurance guide for more information:

Contents coverage

Contents coverage protects the personal belongings inside your rented home. These belongings range from furniture and clothing to electronics, sporting equipment, and more. When adding content coverage to your tenant insurance policy, you will need to decide how much to add. This is known as the coverage limit. Selecting the right coverage limit for contents insurance is extremely important. Otherwise, in the event of a total loss, your insurance might not cover you to replace all the missing items. Thus, before picking your coverage limit, you must calculate the value of your belongings. You will likely have the option of choosing actual cash value or replacement value. If you choose actual cash value, for example, you will need to calculate the actual cash value of your belongings. Please note that an actual cash value contents insurance policy accounts for the depreciation in value of your personal belongings, whereas a replacement value policy does not. For this reason, replacement policies are usually more expensive than actual cash value policies because the payout in the event of a loss would be larger.

Additional living expenses coverage

Additional living expenses coverage is another type of coverage you are likely to find in your Ontario tenant insurance policy. This type of insurance comes into play if you are forced to temporarily move out of your rented home due to damage caused by a covered peril, like a flood or fire. Under the additional living expenses portion of your policy, your insurer can help pay for temporary accommodations, delivery services, a storage unit, additional food bills, and more.

Liability coverage

Finally, personal liability coverage is another core element of Ontario tenant insurance. It protects the policyholder in the event that someone visiting your home injures themselves while on the premises or causes property damage to the unit. It can also cover policyholders if they accidentally damage someone else’s belongings. Many landlords in Ontario require tenants to purchase a minimum amount of liability coverage. While this amount differs, it is usually around $1,000,000.

Optional types of renters insurance coverage

Now that you know more about the three basic types of tenant insurance coverage - contents coverage, additional living expenses coverage, and liability coverage - let’s delve into the optional types of renters insurance coverage. These extra forms of protection can be added to your tenant insurance policy as riders or endorsements. Each offers protection against its own unique risk, like flooding, identity theft, and more:

Overland water coverage

Overland water coverage is a type of flood insurance that can be added to your tenant insurance policy to protect you from the cost of water damage. With overland water coverage, the water damage to your rented home must have occurred due to above-ground water flooding, such as overflow from a nearby lake or river, melting ice, or heavy precipitation. It is especially important if you live near a large body of water in the province, such as Lake Ontario or Georgian Bay.

Sewer backup coverage

Sewer backup coverage protects you in the event that sewage or wastewater backs up into your home. Sewer backups most often affect the basements of homes and can result in a flooded basement. So if you are renting a basement unit or part of your rented space is a basement, adding sewer backup coverage to your tenant insurance policy might be a wise decision. To mitigate the added cost of this extra endorsement, you may wish to consider adding a sewer backup detection device to your property, which can help you qualify for a tenant insurance discount.

Identity theft coverage

If a third party steals any of your personal identification or information, such as your Ontario driver’s licence, passport, credit card, or Social insurance number (SIN), and subsequently uses it to commit a crime, identity theft coverage can protect you. With this type of insurance, your insurance company can reimburse you for any funds lost or incurred to recover or replace the missing identification and information.

Personal valuables coverage

Finally, personal valuables coverage is another tenant insurance add-on. Think of it as an extension of contents coverage. Given that contents coverage often has strict limits, some renters may not find that this type of coverage alone is sufficient to cover their belongings. That’s where personal valuables coverage comes in. If you have lots of expensive items in your home, such as fine jewellery, vintage wine, or original artwork, you can inquire about adding a personal valuables floater or rider to your policy to ensure these high-value items are fully protected in the event of loss or damage.

Factors that impact how much tenant insurance costs in Ontario

The cost of tenant insurance in Ontario varies significantly, especially when you consider all the different types of residential properties in the province. Thankfully, an insurance broker in Ontario can help you find the right coverage for your home while providing insight into how much a tenant insurance policy will cost. Tenant insurance rates are dependent on several factors that are specific to you and the property you rent. We lay out some of the biggest factors that will come into play when an insurance company is calculating your tenant insurance premium:

Property type

The type of property you rent is one of the most significant factors that an insurance company will use to determine how much your tenant insurance policy costs. From studio apartments and basements to condos and townhomes, each type of residential property comes with its own unique risks.

Location

Location is another extremely important factor when it comes to tenant insurance rates in Ontario. The neighbourhood or city you live in can have a major impact on the amount you pay for tenant insurance coverage. Specifically, an insurance company will look at how prone the area is to crime, such as theft and vandalism, as well as how likely it is to experience a climate-related weather event, such as a flood or earthquake.

The value of your personal belongings

Since contents coverage is a key element of any tenant insurance policy, it won’t come as a surprise that the value of your personal belongings is another factor that matters. The more items you want covered, and the more valuable these items are, the more expensive your tenant insurance policy is likely to be. Rented homes with lots of high-value items, such as fine jewellery or musical instruments, will require higher coverage limits and possibly even personal valuables floaters, which will increase your tenant insurance premium.

Credit score

Some insurance companies will assess your credit score when calculating your tenant insurance premium. Reach out to a BrokerLink insurance advisor to learn more about how credit scores can influence renters insurance rates. Hint: the higher your credit score, the lower your premium may be.

Roommates

If there is more than one person living in your rented home, this can also influence how much you pay for tenant insurance. The more people who reside in your space, the more your coverage will cost. Keep in mind that in some cases, having each member of the household purchase their own tenant insurance policy might make the most financial sense. Speak with a BrokerLink insurance advisor if you aren’t sure whether to purchase individual tenant insurance policies or to name multiple people under one policy.

Pets

Having a pet in your home may also affect your tenant insurance rates, especially if the specific type or breed of pet is a liability. For example, certain dog breeds might result in an insurance premium increase due to the added risk they create.

Personal insurance claims history

An insurance agent will look at your personal insurance claims history when calculating your premium. Why? If you have a long history of insurance claims, you could be deemed high-risk, which is likely to lead to higher tenant insurance rates.

Examples of tenant insurance claims in Ontario

If you purchase tenant insurance and something goes wrong, you might be able to file a claim with your insurance provider. Your ability to file a claim and have that claim approved depends on the circumstances of the incident and the coverages included in your policy. However, generally speaking, your tenant insurance policy should cover the following types of claims, which are among the most common tenant insurance claims in Ontario:

Theft

Theft is widely regarded as the most common type of tenant insurance claim in Canada. If theft is a named peril in your policy, your insurer will help pay for the cost of replacing any personal belongings that are stolen from your rented property.

Third party liability

Third party liability claims are another common type of claim, which would be covered by the liability or personal liability portion of your policy. Given how expensive a single lawsuit can be, purchasing tenant insurance is considered to be a cost-effective alternative. Remember that one slip and fall incident could cost tens of thousands of dollars in legal fees, medical expenses, and more.

Fire

A fire breaking out in your home and damaging your belongings is another common reason for tenant insurance claims in Ontario. Assuming fire is a named peril in your tenant insurance policy, your insurer can help pay to replace any damaged items under the contents coverage portion of your policy. Meanwhile, the additional living expenses coverage portion of your policy can help pay for the cost of temporary accommodation while your unit is repaired.

Flooded basement

The fourth and final type of tenant insurance claim that is all too common in Ontario is a flooded basement claim. Depending on the circumstances surrounding the flood, your tenant insurance policy can protect you, so long as you added overland water coverage or sewer backup coverage to it. With these types of coverages, your insurance company will help pay for the cost of replacing any items that were lost or damaged due to the flood.

Landlord insurance vs. tenant insurance

Now that you know a little bit more about renters insurance in Ontario, let’s clear up a common misconception: that landlord insurance and tenant insurance are the same. Many renters believe that landlord insurance offers sufficient coverage for tenants, but this couldn’t be further from the truth. While landlord insurance covers damage to the physical dwelling you reside in, it will not cover your personal belongings. Landlord insurance may also cover damage to the permanent fixtures in your unit, such as equipment, HVAC units, and window coverings. However, it does not provide any liability coverage for the tenant. At the end of the day, landlord insurance is designed to protect the landlord and the owner of the building, not the tenant. If you rely solely on landlord insurance, you could be in trouble, especially if a third party claim is brought against you or your personal belongings are damaged or stolen. Thus, it is always a wise decision to cover yourself by purchasing a tenant insurance policy. Find out more about tenant and landlord responsibilities by contacting BrokerLink.

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BrokerLink is proud to serve the Ontario community. We specialize in providing Ontario residents far and wide with all types of home insurance coverage, from homeowner’s insurance and vacation property insurance to tenant insurance and much more. Find out more about our community efforts by giving us a call and speaking with a BrokerLink insurance advisor today.

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At Ontario BrokerLink, we’re here to help you with any insurance needs you may have. Whether it’s insuring your home, car, business, recreational items, or pets, let us help you find the best coverage possible. We can also explain complicated industry terms, like additional interest home insurance.

You can reach us by phone, email, or in person at any of our Ontario locations. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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Ontario tenant insurance FAQs

I live with roommates. Do each of us need to buy our own renters insurance policy?

While it is possible to add multiple people to one tenant insurance policy, there are usually limits. For example, some insurance companies may not allow more than two, three, or four tenants to be added to the same policy. Further, purchasing one policy for multiple people may not be the most cost effective or wisest option.

One of the main reasons for this is that the contents coverage portion of your policy may only protect the primary policyholder, which means if every tenant’s belongings were damaged in a fire, not all of them would be covered. Plus, if multiple people are named under a single policy, any named person has the ability to file a claim. Thus, if one of your roommates were to make multiple claims, this could adversely affect you and your rates down the line.

What is not covered by tenant insurance?

Tenant insurance is designed to offer financial protection to renters, but it won’t cover everything. For example, if you rent your property illegally or intentionally damage it, your insurer will deny your claim. Similarly, if your property was damaged due to war or terrorism or any peril not explicitly stated in your policy, you won’t be covered. In addition, if your home is flooded but you opted not to include overland water coverage or sewer backup coverage in your policy, your tenant insurance plan will not protect you.

Can I add flood insurance to my Ontario tenant insurance policy?

Yes, many insurance companies allow renters to add flood insurance to their Ontario tenant insurance policy in the form of overland water coverage or sewer backup coverage. This is usually a smart decision given how damaging water can be.

If you have any questions, contact one of our local branches.