Mackay Insurance Blog
Renter Insurance vs Tenant Insurance: Which Type Do You Need?
“Renter insurance” and “tenant insurance”...These two terms sound very much alike, but are they the same thing?
This is a great question!
Actually, here in Canada, renter insurance is not the same thing as tenant insurance. And you really do need to know the difference in order to be sure you are purchasing the correct policy type for your specific needs.
In this post, we break down the definitions of each insurance product, what renter insurance covers vs. what tenant insurance covers, and how to know when to purchase each!
Tenant Insurance vs. Renter Insurance: Definition of Terms
Tenant insurance is insurance that protects you while you are renting a home, condo, apartment or other type of living quarters.
You would want to purchase tenant insurance in order to protect your belongings from loss, theft, damage or destruction while you are living in a rented space.
Renter insurance is a term used to make your existing insurance carrier aware if you are renting out part of, or all of your home.
You would want to purchase renter insurance if you have, or are planning to have, a renter, lodger, AIRBNB or long-term boarder living on your primary or secondary property.
What Does Renter Insurance Cover?
Renter insurance is a special type of insurance product that is designed to provide property, liability and possible contents coverage for a number of perils.
Your renter would be responsible for their own tenants coverage, which provides protection for their own contents as well as liability coverage.
What Does Tenant Insurance Cover?
Tenant insurance is designed to provide coverage for personal property and possessions (items inside your rented space) only as well as liability protection.
Here, the property owner or landlord typically carries a separate insurance policy to protect the property and structure itself.
As the tenant (renter), your tenant insurance policy covers what the landlord's policy does not cover.
Examples of the types of items a typical tenant insurance policy will cover include:
- Musical Instruments
- Sports Equipment
Who Needs to Carry Renter Insurance?
Renter insurance is an insurance product designed with property owners in mind.
For example, let's say you have a home that includes a garage apartment or furnished basement that you rent out to tenants. Alternately, perhaps you rent out a room or suite in your home to a lodger or boarder.
You would want to carry a renter insurance policy as an add-on to your homeowner's insurance policy that protects you from liability related to your tenant's presence or personal possessions on your property.
Many people insure their homes as a principal homeowners policy and the company is not made aware that any portion is being rented. This could put the entire policy in jeopardy!
Who Needs to Carry Tenant Insurance?
Tenant insurance is an insurance product designed with renters, lodgers and boarders in mind.
For example, let's say you are paying rent to live in a traditional apartment, garage apartment, condo, basement, room or suite. Your landlord has homeowner's insurance to cover damage or destruction for the premises and structures.
But that policy doesn't protect you or your property!
You would still need to carry your own tenant insurance in order to protect anything you store inside your rented space, so if something happens you have coverage to replace damaged, lost or stolen items.
In addition, you may need coverage if you cause damage to the property or premises - even if you had no intention to cause harm.
One of the most common examples of unintentional harm is fire damage that results from an unattended burning candle or cigarette. Another common example is pipe damage caused by flushing impassible solid matter down a commode.
Finally, you may need to carry tenant insurance to cover costs for a temporary relocation if your unit or living space is damaged or destroyed.
How to Know How Much Tenant Insurance You Need?
When you are selecting your level of tenant insurance coverage, consider your needs in these key areas:
Contents (personal property)
Figuring out how much coverage you need for contents is as simple as calculating the value of your personal property.
For example, how much would it cost to replace your computer, phone, clothing and furniture? Be sure to consider what it would cost you to replace the item versus how much that item is currently worth after adjusting for deflation.
Third Party Liability
In most cases, third party liability coverage starts at $1,000,000. However, for only around $25 a year more, increasing this to a $2 million policy offers far more protection.
Additional Living Expenses (temporary relocation)
To calculate how much coverage you need for additional living expenses, consider what you would have to pay in rent and bills to temporarily relocate if your current space became uninhabitable.
What is the going rate for rent in your area? This should be your baseline for coverage.
Mackay Is Your Belleville Tenant Insurance Expert!
Reach out to your friendly and knowledgeable Mackay Insurance brokers to request a FREE QUOTE on affordable renter’s insurance and tenant insurance!