Are you being asked to pay for tenant insurance? Here’s what to do

This article has been updated from a previous version.

In the rapidly evolving real estate landscape in Ontario, renting within budget can complicated at best, a herculean task at worst. And even after you fulfil several requirements and find an apartment that you can not only comfortably rent but feel at home in, there’s even more documents to sign.  

As a condition of a rental lease, most landlords may insist that tenants get insurance to cover their personal belongings and furniture, as well as damage to the unit.  

While it seems like a hassle, it helps both landlords and tenants alike  protect their most precious assets. If you aren’t asked to pay tenant insurance, it might be worth looking into. But if you are, here’s what you need to know.  

What is tenant insurance?   

Tenant insurance protects tenants from financial loss in case of damage to the rented property or to the tenant’s personal belongings by a covered peril (for instance, fire). Some tenant insurance policies also cover living expenses in case of damage. For instance, while the rental property is being repaired, this coverage comes in handy for temporary lodging, meals, and other expenses.   

Some landlords request tenants – whether it’s an individual renter or a set of roommates - to get insured, as most tenant insurance policies include liability coverage, which protects the landlord if someone is injured on their rented property.   

Overall, the coverage ranges from contents, personal and legal liability to additional living expenses.   

Learn more: Tenant insurance safeguards your stuff — and your peace of mind 

Is tenant insurance mandatory?  

In Ontario, tenant insurance is not required by the law. However, landlords can ask for it as a term of a new lease or lease renewal. In the case of existing tenants, landlords can only ask for insurance if the lease is being renewed.  

It is important to note that the landlord cannot take any legal action against the tenants for not having coverage.  

“I’ve rented my townhouse in Mississauga, and we have had the same tenants for the past few years. And earlier, I never thought of mandating tenant insurance,” says Balvant Singh, a landlord based in Brampton. “However, over the past year, I’ve started including tenant insurance as a condition to renewing the rental agreement.”  

Tenant insurance doesn’t just benefit the landlord, it also protects the tenant. If an electrical fire breaks out in a tenant’s unit, for example, they will be able to recover financial losses for all their damaged property and have a safe place to stay until their unit becomes inhabitable again (if it ends up being a big fire). 

The physical damage to the property will also be covered under the tenant’s insurance, so the landlord won’t be held responsible for it.   

“It’s a great way of having peace of mind for renters and landlords, alike. If something is lost, stolen, or damaged, we are all covered,” he adds.  

Related: How much home insurance do you need? 

Asked to get tenant insurance? Shop around!  

Now that you know this is a beneficial deal for both the parties, how much do you shell out for insurance coverage?   

Tenant insurance costs an average of $300 per year, with minimum monthly payments of $20 to $30. This amount may vary if you decide to opt for additional coverage in your tenant insurance policy.  

At this stage, it is also wise to shop around for tenant insurance to make sure you are getting the best value for your money.   

So, if you’re asked by your landlord to get tenant insurance, you should:  

1. Ask your landlord for details about the type and amount of insurance coverage required.  

2. Shop around for insurance at LowestRates.ca and research different insurance providers to find the best policy for your needs and budget.  

3. Finalize your policy. Keep proof of insurance and share it with your landlord.   

4. Review your policy regularly to make sure all your needs are covered.  

A tenant insurance policy keeps the place you call home safe, secure, and covered. And we all want and deserve that comfort.  

Read more: Factors that affect tenant insurance