6 Benefits of Having Liability Insurance for Renters

If you own a property in Canada, you will most definitely need a home insurance policy to protect it. 

However, even if you rent an apartment or a home, you must have an insurance policy to protect your belongings. The landlord’s property insurance policy will cover the home or the dwelling, be it an apartment or a house. However, a renters insurance policy will only cover your personal properties and belongings.

Unfortunately, only 41% of all the renters in Canada have renters insurance policies. 

Most people lack knowledge and assume that the landlord’s policy will protect their belongings. Another reason might be that the renters might underestimate their possessions. So to help you understand the answer to the question, “what is liability insurance for renters?” and the importance of having liability insurance.

If you’re looking for home insurance quotes, feel free to click the following link to get started: https://www.surex.com/Insurance/home/Alberta.

What is renters liability insurance?

This is an essential part of a renters insurance policy which covers them if they are responsible for any injuries to third parties or damage to the property. 

For example, you are playing football in the backyard of your rental home. However, you kick the ball too hard, hitting another person walking on the street or someone else’s window and shattering the glass. In such cases, your rental insurance will pay for the broken window or medical injuries. It might also pay any legal fee if the third party decides to sue you. 

In most uses, rental insurance liability coverage usually starts at $100,000 limits for claims and lawsuits. However, you can also buy additional coverage to increase your liability limits.

Exclusive benefits of having liability insurance for renters

These five benefits will help you understand “what is liability insurance for renters?” and whether having a renter’s liability insurance is worth it.

• Renter’s insurance is pretty cheap.

According to the National Association of Insurance Commissioners (NAIC), the average premium for a renters insurance policy in Canada is about $15 to $30 per month in 2022. However, the actual premium charges will depend on numerous factors like the type of coverage you need, the amount of coverage you need, your area of residence and the amount of deductible.

• You might get additional living expenses.

If your rental home becomes uninhabitable due to any accident or other covered peril, the renters insurance policy will offer additional living expenses. This sum will include any cost associated when living somewhere else, like in a hotel or any other apartment temporarily, and will also pay for food and other supplies. However, it is advised that you check the insurance agent or the company to find the amount and period of additional living expenses.

• Liability coverage

As discussed earlier, liability coverage is also offered with a standard renters insurance policy. Therefore you are completely protected if any third person is injured in your rental property or if you accidentally injure someone. The coverage will also cover all the costs for court judgements and legal expenses up to a specific limit.

Most standard insurance policies offer approximately $100,000 in liability coverage and a minimum amount for medical payments coverage. However, you can also request higher coverage limits if required.

However,  liability coverage will not cover any losses caused due to negligence or intentional human acts.

• Will pay for any loss of personal property and belongings

Most renters often wonder, “What is contents insurance for renters?” Contents insurance will protect against losses to personal belongings like jewellery, clothes, furniture, computers and other electronics. The renters’ insurance policy will pay for any losses to personal property from different types of perils. Some of the common ones include:

• Theft
• vandalism
• Explosions
• Riots
• Volcanic eruption
• Windstorms
• Snowstorms
• Smoke
• Lightning
• Fires
• Damage from aircrafts
• Damage from vehicles
• Falling objects
• Damage from any household appliances like air conditioning plumbing or the HVAC system

However, the policy will not cover any losses incurred due to earthquakes or floods. In such a scenario, you have to get separate add-on insurance. The policyholder may need to buy an add-on policy if the rental property is in a windy area prone to hurricanes.

• Having rental insurance might be mandatory in certain areas

The landlord’s home insurance will pay for the property’s structure but not your personal belongings. Also, nowadays, most landlords require their tenants to have their own renters’ insurance policy. They might also ask for it as proof while they are renting the property.

• Protection even if you are not home

Did you know that the insurance will also offer coverage even if you are away from home?

For example, suppose a thief or a burglar breaks into your home while you are away and steals expensive items like tablets and television, laptops. In that case, your renters’ insurance will offer coverage.

But it is always advised that you consult your insurance agent and learn about the things covered by the policy. For example, your insurance company may offer coverage for specific electronics and jewellery. So if you own expensive items like antiques and paintings, you should schedule each item carefully in the policy.

Cost of renter’s insurance

Renter’s insurance is one of the cheapest insurance policies available. This is because the risk involved is much lower than other types of insurance. You can get one for as low as $23 a month. This can vary depending on the province you reside in. However, in any case, you would not be paying anything more than $30 a month. 

What is liability insurance for renters? —Endnote

So these benefits will help you understand “what is renters insurance for?” and why it is mandatory that you have one. By investing a small amount with a standard tenant insurance policy, you would be developing an insurance history which will help you quickly get a home insurance policy when you purchase your first home. 

Before buying the policy, clear all the doubts with the insurance agent and ask them about the coverage limits and available discounts. Make sure you have a proper idea about the replacement cost coverage and actual cash value of your properties.