Tenant insurance: what your landlord’s policy does not cover

Every renter has heard that the building is insured. It is. That policy covers the structure, the roof, the boiler and the corridors. It covers none of your things, none of your liability, and none of the cost of living somewhere else while the unit is repaired.

The claim nobody plans for

A washing machine hose fails on the fourth floor at two in the morning. By six, water has moved through three units. The building policy repairs the building. The tenants on the third floor, whose furniture, laptops and clothes are ruined, are on their own unless they bought tenant insurance. And the tenant on the fourth floor, whose hose it was, may be looking at a subrogation claim from the building’s insurer for the repair.

That second half is why the liability limit matters more than the contents limit. We place $2 million as standard, because the arithmetic of a multi-unit building does not work at $1 million.

What is actually in the policy

• Contents, on a replacement cost basis if you ask for it. Most people underestimate their own by half until they walk the apartment and add it up.
• Personal liability, which follows you rather than the unit. It is why the same policy responds if your dog bites someone in a park.
• Additional living expenses, which pays the difference between your rent and a short-term rate while you cannot live at home.
• Off-premises coverage for the laptop stolen from a café or the luggage lost in transit.
• Sewer backup, as an endorsement, which is not optional in any meaningful sense if you rent a basement unit.

What it costs

Across Canada a tenant policy generally runs between eighteen and thirty-five dollars a month, depending on the city, the building, the contents limit and whether the unit is above or below grade. Bundling it with an auto policy usually takes ten to fifteen per cent off both.

Most Canadian leases now require tenant insurance in writing, and a growing number require proof of a $2 million liability limit specifically. Check your lease before you choose a limit.

Three situations worth a phone call

You have a roommate

A roommate is not automatically covered by your policy. Either name them, or have them buy their own. Insurers differ on which they will allow, and the answer changes depending on whether you are on the same lease.

You are a student living away from home

A dependent student living away from a parent’s home is often covered, partly, under the parent’s home policy, usually at a reduced limit and only while they remain a dependant. It is worth confirming rather than assuming, and it stops applying the moment they are no longer a student.

You work from the unit

A laptop and a desk are fine. Client visits, inventory, and equipment you depend on for income are not, and they need either an endorsement or a small commercial policy.