These are the pros and cons of paying for tenant insurance
TORONTO -- If you own a house, chances are you have home insurance to protect yourself in case disaster strikes but what if you rent?
Unlike auto insurance, tenant insurance is not mandatory, but there are some good reasons to have a policy to safeguard yourself and belongings.
Gurpreet Khosla and her daughter Heer recently moved to Canada and are renting a condominium in Toronto.
Khosla said she was advised to get tenant insurance and after checking it out decided it made good sense.
“These are unprecedented times and with certain things that could happen, it could leave you with a loss of what to do and where to stay, so I think it’s a very big plus to have," Khosla said.
It's hard to know how many renters have tenant insurance, but many landlords now require it as a condition of their lease.
Matt Hands, Director of Insurance with RateHub.ca, said some tenants might think their landlord's insurance will cover their belongings if there is a loss, but that's not the case.
“Just because your renting a place from a landlord you're not covered under their policy. None of your contents or your well being is covered under their insurance,” Hands said.
Hands said tenant insurance covers furniture, clothing and most belongings and provides funds for temporary living expenses if you need to stay in a hotel.
It also provides liability insurance in case of accident or injury in your unit or if your actions damage another unit.
Tenant insurance will cover the loss of your belongings in case of a flood, fire and other disasters. It will also reimburse you if items are stolen from your unit or even out of your car depending on the policy.
“It is $15 to $20 a month, but there are instances where it could rise above that amount," said Hands.
Your monthly premiums will depend on factors like how much you have to insure, where you're living, your claims history and the amount of the deductible.
If you have expensive bikes, jewelry or collections you may also pay more with an insurance rider or higher premium. The best advice is to shop around and check the policy carefully.
“Renters insurance is fairly standardized, though coverage can vary based on the insurer and where you live. Bottom line: make sure you understand your policy--what's covered and what's not,” said Penny Wang, Money Editor with Consumer Reports.
Khosla said after weighing the pros and cons she feels it's a worthwhile expense as it's something you hope you never need, but is a safety net if something does happen.
“Definitely with all the options that it does cover I think it’s worth it,” said Khosla.
Whether it's tenant or home insurance you should have an inventory of all your belongings. The easiest way is to take photos or video, but it's preferred to have a detailed list with model numbers and receipts and it should be updated and kept in a safe place.