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Introduction - Assignment 2 (Renter's Insurance)

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Introduction - Assignment 2 (Renter's Insurance)

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Hello! In this Padlet, I will be discussing Renter's Insurance: What it is, How it works, Why it is important, as well as why you should consider it!

Renter's often do not realize that they have a form of insurance that is similar to Homeowner's insurance that can protect them from unexpected expenses. While it does not cover structural damages, it can be very helpful for renters to save their assets as well.

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This video explains the basics of what Renter's Insurance is. MoneyCoach explains how Renter's Insurance functions like a Homeowner's Insurance in the sense that it protects the insured person(s)'s property from being damaged or stolen. The Insurer covers the policyholder through a "premium," which the Insurer gives an estimation for according to the policyholder's assets and coverage value. He also explains how the deductible and limits work within it, as deductibles are the "amount you pay until the insurer pays the rest" and the boundary being the "maximum insurer pays".

I chose this video because MoneyCoach explained Renter's Insurance was beneficial with graphics and easy-to-understand examples. Initially, it is easy to read through terminology used within insurance documents. It can sometimes be hard to understand why someone (in this case, a renter) could use it. The simple visual examples that MoneyCoach uses to show how much a person could pay out of their pocket during an unexpected expense helps to put into perspective why exactly renter's insurance is helpful.

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Renters Insurance 101 (Apartment Hunting 2/3)

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Vincent Chan (The Simple Dollar) explains in "How Much Renters Insurance Do I Need?" an in-depth look at how Renter's Insurance works, how it works, what steps someone can take to assess their inventory/risk factors, alternatives to having Renter's insurance (emergency fund), as well as ways to reduce premiums. Vincent starts with a topic that many beginners may see as an easy question but find it hard to answer: How much Renter's Insurance Do I Need? He tackles this by explaining how to calculate Renter's Insurance with some example steps to calculate the inventory. After assessing inventory value, Vincent speaks about how to understand how to pick a value for the deductible someone would need. After understanding Renter's Insurance's financial value and how it can help someone, he also explains the more minor details like the minimum amount of Renter's Insurance someone can have and how to reduce insurance premiums.

I found this video to be a much clearer video in explaining to myself and anyone interested in the topic of Renter's Insurance how much Renter's Insurance I would need if I needed it. Vincent explains with an in-depth walkthrough how Renter's Insurance works in an easy process, from performing an inventory analysis to understanding how much someone would want to pay for a deductible and if an emergency fund is required.  One important note that I found helpful from his video was the note of accounting for liabilities and installing safety devices like cameras, fire alarms, etc. These tips are great tips that help new renters as purely explanation videos may skip over this information and proceed to just teaching someone how the Insurance policy works.

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How Much Renters Insurance Do I Need? (EXPLAINED)

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In this video by Vincent Chan (The Simple Dollar), he explains coverage myths and exclusions and what is covered. When people ask their co-workers, friends or family, people misunderstand what Renter's Insurance can cover and exclude. For example, in the video, Vincent answers exciting questions like "Renter's Insurance covers damage you cause to your home or apartment," which many people understand to be the whole purpose of Renter's Insurance. However, he explains what an insured holder would be responsible for.

This video was beneficial to gaining a deeper understanding of what exactly Renter's Insurance can cover and what it excludes, and what to consider concerning the premiums you have to pay. I did not know before this video was what types of inventory have different coverage levels. For example, in the video, Vincent explained how if someone had jewellery within their home, it could cover a value lower than the asset's actual value.

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What Does Renters Insurance Cover? (Overview)

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In this video, the Excalibur Insurance Group takes a fast video explaining what you need to know about Renter's Insurance. Like videos that explain what Renter's Insurance is, this video helps to answer essential FAQs about Renter's Insurance. It goes over how Renter's Insurance can insurance inventory lost due to various reasons and explaining what the policy extends to while the policy holder's home is under repair (living expenses).

This video helps understand a more real-life perspective on how Renter's Insurance can help someone by using FAQs to answer real problems that someone may encounter. Like when the video explained how if a person accidentally hit someone while on a bike and their laptop broke, that Renter's Insurance could help to cover that expense.

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Ontario Renters Insurance – Here’s what you need to know

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TD Insurance explains what Renter's Insurance is, how it is the same as "Tenant Insurance," what it includes within its coverage, and factors associated with why a renter would need Tenant Insurance. They also have a section where readers can request a Renter's Insurance quote from TD Insurance. TD Insurance has a very informative webpage regarding Renters/Tenants Insurance. Therefore making this site a very professional, official and detailed site that is easy to understand what Renter's Insurance is, how it can benefit the renter to have it, and types of costs that can help a renter avoid or reduce.

While having videos is often very helpful to visually understanding content, it is also integral that there should be written terms that define and explain various legalities. TD Insurance does a wonderful job at having a simple web page that explains the essential questions around explaining Renters/Tenants Insurance and a quick link to getting a Renter's Insurance Quote from them.

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More often than not the landlord's insurance will not provide coverage for your belongings if damaged, or protect you if someone is injured in your home. Also, if you were found liable for damages to the building the landlord's insurance company could sue you to recover the cost of repairing or rebuilding the structure. Tenant insurance can offer you financial protection in these cases and more.

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If you rent, tenant insurance can help you feel secure that your home and investments are protected. Learn more about how tenant coverage works.

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RateHub's article about Renter's Insurance explains what Renter's Insurance is, average prices in Ontario and compares it to other locations,  as well as some notable shortcomings about Renter's Insurance.

Three interesting mentions from this article would be the usage of real-world expenses and comparing that to how much Renter's Insurance is, understanding how Tenant Insurance does not cover the subleasing a policy holder's place, as well as further defining replacement and actual cash values of items used during insurance calculations. One key difference that RateHub helped to clarify is the note of the subletting, as many sites, even TD Insurance, did not note the subletting factor when having a Renter/Tenant insurance policy.

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When people buy a home, they need to get home insurance to protect their largest investment. For those who rent, you may not be insuring the home - but what about your valuables and liability? A SquareOne Insurance survey from BC revealed almost 60% of those who rent a home don't have a tenant or renter's insurance policy.

The reasons for not having this type of insurance vary, including:

"My landlord already has an insurance policy." Yes, he or she might already have it, but it doesn't cover any of your items (contents) nor your liability. Think about flooding your neighbour's unit, or causing a fire that leads to damages in other units.

"It's too expensive." This is a misinformed excuse for those who have never compared prices for tenant insurance. This type of insurance policy starts at $10 per month, meaning that you can often have a comprehensive protection policy for the price of two Starbucks Frappuccinos.

"I have nothing to protect." Well, there's your clothes, your laptop, TV, personal items and many other items that you need to buy if everything you have gets damaged. Maybe it's not much, but you definitely have to cover some costs in the case of an accident.

How much is tenant insurance?

The costs of tenant insurance are inexpensive. It's easy to get cheap online condo insurance quotes - in fact, it's one of the cheapest insurance types out there. On average, Canadians pay $23 per month in tenant insurance. BC insurance quotes come in on the higher end at $26 per month, while Ontario insurance quotes are on the lower end at $21 per month.

In general, tenant insurance quotes are affordable but can go up if you have additional protection needs that require extended coverage. A basic home insurance policy has limits on items like jewellery, fine art, and even bicycles. If you have valuables that may extend beyond the limits in your policy, consider adding an endorsement to cover those items in their entirety.

What does tenant insurance cover?

Unlike homeowners' insurance that covers numerous items, the protection offered by tenant insurance is very clear - it consists of three main elements:

Contents: This includes any of the items that might be damaged from a disaster or stolen from your rental space. In other words, without this coverage, you'll pay out of pocket to replace your damaged or stolen items. On the low-end, consider at least $20,000 coverage for TV's, computers, and furniture. But if you have large collections or expensive valuables, you can add more coverage for a higher monthly premium. Note: Your insurance provider may require receipts or photos as proof that you do own the items.

Third-party liability: Liability covers you in case you are sued for damage to other units from flooding or causing a fire that spreads to other apartments. It also protects you in case someone injures themselves, or their property in your unit and wants to recoup their expenses. The minimal recommended coverage is $100,000, but we suggest you get at least $1 million. If you can afford it, go for $2 million.

Additional living expenses: After a disaster, renting a comparable space while yours is being repaired can be expensive if you don't have this coverage. Make sure you understand what your insurance policy will cover. For example, if your living expenses are capped at $24,000, you would only be able to get a condo or a rental apartment for $2,000/month for 12 months. Is that enough?

What tenant insurance does not cover

Despite being a simple insurance product, you should be aware of some tenant insurance pitfalls.

Subletting your place: Short and simple - most policies will not cover you if you sublet (or Airbnb) your rented unit to somebody else. If that person does not get his/her own tenant insurance, you are carrying the risk on your own. This is especially important when it comes to a third-party liability claim.

Actual cash value vs. replacement costs: There are two insurance calculations used to determine the value of your items:

Replacement costs An insurer will pay you enough to substitute your damaged item with a similar one in today's costs.

Actual cash value An insurer considers what you would pay for that item today and subtract any depreciation. In other words, actual cash value = replacement value - depreciation.

We hope these tenant insurance insights will make you a more responsible renter and helping you avoid any unpleasant surprises with your rented unit.
ALSO READ:
Flickr: Park Van Ness

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What is tenant insurance? (costs, coverage, and gaps) - Ratehub.ca Blog

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When people buy a home, they need to get home insurance to protect their largest investment. For those who rent, you may not be insuring the home - but what about your valuables and liability? A SquareOne Insurance survey from BC revealed almost 60% of those who rent a home don't have a tenant or renter's insurance policy.

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Billyard Insurance Group (BIG) has an informative blog post regarding if Renter/Tenant Insurance is mandatory in Ontario. They cover what it is in a simple yet accurate explanation, what it covers: liabilities, contents, living expenses, how much it costs, as well as the initial question of if it is mandatory.

A unique perspective about BIG's blog post that caught my attention is the post's audience. Unlike some insurance posts or explanation articles, the focus is not on the actual policy. Instead, the focus is on the tenant to understand whether they would need the policy. Throughout the blog post, BIG constantly uses examples that pertain to the reader and their needs and wants. Comparatively, TD Insurance, for instance, will define the coverage values only of assets and inventory as examples.

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Moving out on your own and signing that new lease is a great step towards independence. If you've recently moved into a new place, or you're looking at your budget while apartment hunting, you may be wondering, "is tenant insurance mandatory in Ontario?" Regardless of whether you are renting an apartment or a whole house, you should consider getting tenant's insurance to cover you in many circumstances. What does tenant insurance cover? Keep reading this blog to learn more about how tenant insurance is a great choice when you move into your new place!

What Is Tenant Insurance?

Tenant insurance, also commonly called renter's insurance, can be compared in many ways to home insurance. The primary difference between tenant insurance and home insurance is that tenant insurance does not provide coverage for the actual building itself because it's the responsibility of the landlord who owns it. Rather, tenant insurance is tailored towards protecting your personal property within the home, liability and additional living expenses if you have to make a claim. Each policy can be tailored uniquely to your stiuation, but let's take a look at those coverages options more closely:

What Does Tenant Insurance Cover: Liability

Personal Liability is a coverage designed to protect you legally if you accidentally injure someone, or they are hurt on your property. If you don't have tenant insurance, you are on the hook to pay for any damages and legal fees associated with a lawsuit against you. Tenant insurance provides peace of mind and financial protection for you if someone sues you due to injury. A basic policy will cover you for $1 million, and you can also increase your liability limit to $2 million with many of our carriers.

What Does Tenant Insurance Cover: Contents

Contents coverage can be purchase for a specific dollar amount (ie. $40,000) to cover the cost of repairing or replacing household items in the event of a covered claim. This can include any of your belongings such as furniture, clothing, electronics, jewelry, etc. The cost of items adds up quickly, so it's important to build a home inventory to get an accurate estimate of your personal property. Some items may be subject to limits, so speak with a broker so that you understand clearly what limits may exist on your policy. You can also take out a rider for individual items that are more costly including fine art, special jewelry such as an engagement ring, or wine collections as they may exceed the regular limits within your contents coverage.

What Does Tenant Insurance Cover: Additional Living Expenses

If you end up with a flood, fire, or other loss, it may render your home unlivable until repairs are complete. With tenant insurance, while they assist you in the cost of damage to your personal property, they also provide finances for living expenses associated with having to live elsewhere temporarily. Additional Living Expenses coverage (ALE) will often include meals and a temporary rental or hotel while repairs are going on. This coverage can also apply if the accident originated in another apartment unit in your building but you were affected by the damages.

Is Tenant Insurance Mandatory in Ontario?

The simple answer to the question, "is tenant insurance mandatory in Ontario?" is no, Ontario does not require that all renters have tenant insurance. Often a landlord will require a tenant to obtain renters insurance as a condition in the lease. As you can see, there are so many benefits to having coverage even if it's not required! A common misconception is that if the damage is caused by another tenant in the building, the landlord or neighbour is required to pay the damage to your contents, however this is not true. If a neighbouring unit causes a fire or flood and subsequent damage to your personal property, without tenant insurance, you are responsible for repairing or replacing your belongings. On the other hand, if you are responsible for damage to the building and other units, you may be sued and expected to pay. Even if your landlord doesn't require tenant insurance, there are many benefits to having a policy for a very small cost.

How Much Does Tenant Insurance Cost?

There are several variables affecting the cost of tenant insurance, but you can usually find basic coverage for as little as $20 per month. When you add up the value of personal property you've acquired over the years such as electronics, furniture and clothing, the security of a tenant insurance policy is highly valuable. Keep in mind that you will choose a deductible, which you must pay towards the claim before your insurance starts paying.

While we've answered the question of, "is tenant insurance mandatory in Ontario?" when you can get tenant insurance for such a minimal cost, it's definitely worth the purchasing when you consider all that tenant insurance covers. You may also be able to bundle your tenant package with your auto insurance to get an even greater discount! If you're ready to get a tenant policy today, or to learn more, our BIG brokers are available to help get you a no-obligation quote. Contact us to get started!

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is tenant insurance mandatory in ontario

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Is Tenant Insurance Mandatory in Ontario?

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If you've recently moved into a new place, or you're looking at your budget while apartment hunting, you may be wondering, "is tenant insurance mandatory in Ontario?" What does tenant insurance cover? Keep reading to learn more about how tenant insurance is a great choice when you move into your new place!

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Settlement.org has an article about whether or not someone would need Renter/Tenant Insurance. The focus is on answer questions like if a tenant is legally required to have tenant insurance before renting an apartment, what the policy covers, what the deductible is, and if a landlord can force a tenant to get a policy.

An interesting note that I had not known from any other website that I had come across is whether a tenant is legally obligated to have Tenant Insurance before moving in and if the landlord could lawfully force the tenant to purchase that. Settlement.org clarified that point by stating that a tenant is "not legally obligated" to have Tenants Insurance, though the landlord may need the new tenant to have it before renting it to them. If the landlord can force them or not, the answer is no - the landlord cannot legally force a tenant to get Tenant Insurance.

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You are not legally obligated to get tenant insurance but a landlord may require that you get insurance before they rent an apartment to you.

Landlords have property insurance for the building or house itself but this doesn't include coverage for the contents of your rental unit. There is a common misunderstanding that if there is a flood or a fire that was caused by a neighbouring unit or by the landlord themselves, that they will cover the damages to your contents. Without insurance, you would be required to pay the replacement costs yourself.

Another misconception is if you cause damage by accident to other units or your landlord's home, that you won't have to pay for the damages. If you are held responsible, you can be sued and expected to pay. These are some important reasons why you might consider getting tenant insurance even if your landlord doesn't require it.

What is covered in a tenant or "renter's" insurance?

There are different policies you can get depending on where you purchase your insurance (private insurance companies and some banks). In some cases, you can customize the types of protections you pay for depending on your specific needs.

The standard features for most plans include:

Contents: Covers loss of personal belongings (furniture, clothing, electronics, jewelry)

Personal Liability: Protects you if someone hurts themselves while visiting your home or you accidentally cause them injury.

Additional Living Expenses (ALE): Temporary living expenses, including meals and a place to live, if you cannot live at home due to loss or damage.

In some cases, if you have fine artwork or special jewelry like an engagement ring or other types of expensive jewelry, you can pay extra to have special coverage for those. How much money you want your contents to be covered for will affect your premium or yearly fee. A premium is a financial value determined by the insurance you must pay yearly for the type of coverage you require.

How much does insurance cost?

Depending on the range of coverage you choose your premium will vary. You can choose your own deductible and this will also affect your premium. You can have basic coverage for as little as $25 a month. When you consider how much it would cost you to replace all the items in your home like computers, electronics, jewelry, clothing and furniture it is worth the security of having renters' coverage.

What is the deductible?

A deductible is the amount of money you have to pay toward a claim before your insurance starts paying. For example, if there's a broken pipe and your apartment is flooded and there are $15,000 worth of damages and your deductible is $5,000, your insurance will not cover the first $5000 of the damage. In other words, they will cover $10,000. You can choose different deductibles and this will affect the total of what you pay for your insurance policy. Typically, the higher the deductible, the lower the yearly coverage you will have to pay.

What is personal liability?

Personal liability is coverage for when you accidentally injure someone or they get hurt while in your home. For example, if your kitchen floor is wet and a guest slips and breaks their leg, or if you are tossing a ball around at the park and you accidentally hit someone in the face with the ball and break their teeth they may sue you for damages. In these cases, the liability portion of the insurance would cover the costs associated with the injured person's medical bills and recovery.

Why would I need additional living expenses coverage?

If there is a fire or flood and you have to temporarily move out due to reconstruction, this is where you would need additional living expenses (ALE) coverage. This also applies to situations where the accident did not initiate in your unit but you were also affected by the damages.

ALE covers costs you wouldn't normally have like staying in a hotel or rental home and meals. If you stay at a friend's or relative's home or rent a home with a kitchen it would not cover things like groceries because they are considered normal living expenses.

Where can I get tenant insurance?

There are a lot of private insurance companies to choose from, even some banks offer renter's insurance. You can compare renter's insurance online here:

Can my landlord force me to get tenant insurance?

According to the Landlord and Tenant Board, the law does not require you to have tenant insurance and your landlord cannot force you to get it. However, if you agreed to get tenant insurance as part of your lease agreement and then you don't do it, your landlord could give you a notice to terminate the tenancy and then file an application with the LTB to evict you.

For More Information

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Skip Breadcrumb Links You are not legally obligated to get tenant insurance but a landlord may require that you get insurance before they rent an apartment to you. Landlords have property insurance for the building or house itself but this doesn't include coverage for the contents of your rental unit.

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In this image, several assets have various price tags next to them. When calculating the amount of coverage needed for Renter/Tenant Insurance, it is crucial to understand and note the dwelling's inventory value. The coverage amounts differ based on what needs to be insured. It is also essential to understand the inventory value since two types of insurance calculations are done when determining the value of items: Replacement cost and Actual Cash Value (RateHub). These two calculation values can affect the overall coverage that a policyholder can expect for valuable belongings.

Source: https://www.absoluteinsurance.ca/2019/08/tenants-insurance/

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During the process of Rental agreements, many renters go into acquiring a Rental property without thinking twice about needing Renter/Tenant Insurance. However, remembering that it is one of the lowest types of insurance that anyone could have for a low annual premium makes for a beneficial insurance policy that can help out when the renter has a high-value inventory within their home. Protecting those expensive items from robbery, damages, etc., is a beneficial coverage to have in back-up. If the dwelling is damaged and needs to be repaired, living expenses within a hotel can be covered with Renter/Tenant Insurance, rather than affording more costs out of pocket.

Source: https://www.moving.com/tips/why-you-need-renters-insurance/

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Reflective Questions

1. What did you learn about the topic that surprised you most?

When I learned about Renter Insurance, I had always understood it to be another form of cash-grab from an Insurance company that has no impact on me and just a waste of money. After spending time researching it for this assignment, I started to understand how much it is worth and the premium that a holder could pay. In summary, it is beneficial insurance that needs to be considered if the policyholder has some money to spare monthly. If there are unexpected problems in the future, the policyholder does not have to stress as much about out-of-pocket expenses.

2. Provide a real-life example of how this topic is relevant or interesting for you.

Since I am a student and I have lived away from home for the past three years, I had rented property for college. I had known about Renter Insurance briefly as the landlords had asked for it previously before I got a hold on the unit. However, I never looked too far into it since, like I mentioned earlier, I thought it was useless. Next year I will be looking into getting a place again in Oshawa, so it is beneficial to know this kind of insurance exists to help cheaper than other insurance forms.

3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

I would recommend to anyone to look into Renter/Tenant Insurance if they are looking to rent property to live in. Since it has such a low premium attached to it, anyone could get it to help with future expenses. The coverage that it can help with is very useful for covering inventory losses during robberies or fires. I will always suggest now going forward to be more aware of what value the inventory someone has at their home is because it will be easier to understand whether they have an appropriate amount of coverage. This way, they are not left to deal with replacement insurance less than the inventory's actual cash value.