How much is tenant insurance?

Do you really need tenant insurance?

You might be thinking, “Won’t my landlord’s insurance cover me?” The short answer: Nope. If something happens to your building, such as a robbery, a fire or a flood, your landlord’s home insurance, property insurance or condo insurance won’t cover the cost of replacing your damaged or missing belongings. 

Furthermore, if you damage your apartment—say, you start a kitchen fire that affects your unit and those nearby—not only will you pay out of pocket to replace and repair your own belongings, but your landlord and neighbours could sue you for damages. Last but not least, if someone’s accidentally injured while visiting you, your landlord’s insurance won’t protect you against personal liability or cover your legal expenses. You could be on the hook for your guest’s medical bills. 

Without a policy for contents insurance or tenant liability insurance, any of these situations could cost you a fortune, not to mention cause significant stress. Tenant insurance isn’t mandatory, in the sense that you won’t get in trouble with the law (like you would for driving without auto insurance). However, landlords and condo associations can require it and ask you to provide proof of coverage. Even if yours doesn’t, purchasing tenant insurance is a smart decision.

How much is tenant insurance?

Tenant insurance typically ranges from $15 to $50 per month—the more stuff you want to cover, the more you’ll pay. Your insurance premium will also depend on your postal code (insurers look at neighbourhood crime rates), flood risk in your area and other factors. Factors such as your credit score, your past claims history, and even your pets can affect your price.

Watch: What is tenant insurance?

Don’t skimp on insurance just to save a few bucks, though. “People often under-insure themselves, or they think they don’t need insurance because they don’t have that much stuff,” says Morgan Roberts, director of sales at RH Insurance, a brokerage in Toronto. “But if you walk around your house and add up everything you own, it adds up quickly—and if you lose everything, it’s immense to try to replace it all.” 

As a starting point, she recommends estimating $5,000 to $6,000 of coverage per room. Better yet, inventory your possessions and what it would cost to replace them. Once you see the grand total, you might go from “How much is tenant insurance?” to “I can’t afford not to have tenant insurance.” 

What tenant insurance covers

Tenant insurance covers three things:

• Contents (possessions)
• Personal liability
• Additional living expenses

“Tenant insurance is for people who rent an apartment, house or unit, and it covers the tenant’s contents. That includes anything not owned by the landlord—anything you move in with and will take out when you leave,” says Roberts. 

Tenant insurance covers the cost to replace or repair your stuff due to an insured peril, such as theft or a fire. The exceptions: High-value items like jewellery, art, watches or instruments. For these, you’ll need what’s called a “floater,” which is additional coverage. For perils that aren’t covered, such as sewer backups and floods, you can purchase additional coverage for that, too. 

If you’re forced out of your home by an insured loss, such as a fire, tenant insurance covers additional living expenses. “If your apartment building burns down, you may be displaced for a while, and not everyone has somewhere to go or wants to stay with family and friends,” says Roberts. “A major plus side of having tenant’s insurance is that it will pay for you to stay somewhere. You can rent something or stay in a hotel.” Your policy may also cover costs like moving, storage and restaurant meals, subject to coverage limits. 

On the personal liability side, tenant insurance protects you in case someone’s hurt while visiting your apartment. Say, if a friend trips and whacks their head on your coffee table—ouch, for them and for your wallet, if they sue for damages. Tenant insurance also covers property damage you or someone in your household causes to someone else—say, if you flood the unit below yours. Standard tenant insurance typically covers up to $1 million in liability, and you can bump that up to $2 million. (To learn more about what tenant insurance covers, read this.)

What does my landlord’s insurance cover?

Landlord insurance, also called rental income property insurance, is a type of policy that landlords buy. It covers the building and outside structures (like a garage or patio), and items in your apartment that the landlord owns, such as kitchen appliances. It doesn’t cover your belongings. If tenants are displaced due to an insured peril, such as a fire, landlord insurance covers the lost rental income, but not tenants’ living expenses while they’re displaced. (Renting to tenants? Read this for more considerations about tenant insurance.)

Landlord insurance also includes liability coverage for injury or property damage that happens to a visitor or tenant on the property, but not inside your home. It doesn’t apply to your personal liability for injury or property damage. Again, you’ll need tenant insurance for that.

About Jaclyn Law

Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities. Jaclyn completed the Canadian Securities Course in 2022.

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