Landlords have relatively few legal obligations to compensate tenants for damage to or loss of their personal possessions. Tenants, on the other hand, are responsible for the harm they may cause to any part of the building in which they live or to others who live or visit there.
Each insurance company packages tenants’ insurance policies differently, or calls the products by different names, but they all (should) include two kinds of coverage Basic Liability coverage and Contents coverage.
Basic Liability coverage protects you if you or your guests cause damage to the building whether it be your unit or the whole building. If you don’t have this protection and you are sued for the repair costs, you could be financially responsible for the whole bill. This coverage is comparable to the liability coverage in a typical homeowners’ policy.
Contents coverage replaces your belongings if they are lost or damaged. You may think you have little of value, but you would be very surprised how much it would cost you to replace everything all at once. You should insure for an amount representing the new replacement cost of all your belongings. Coverage is on a named perils or an all risk basis. Named perils means your insurance covers only those perils, such as fire and theft, that are specifically named in the insurance policy. All risk means your insurance covers loss or damage resulting from numerous miscellaneous causes.
For more information talk to your insurance representative about your tenants’ insurance needs.
The Insurance Bureau of Canada offers information for consumers to help make them aware of their insurance needs and assist them in understanding the types of insurance available. They are the national industry association representing Canada’s private home, car and business insurers. Its member companies represent 90 per cent of the property and casualty (P&C) insurance market in Canada. For more valuable information from the Insurance Bureau of Canada please visit www.ibc.ca. Courtesy of the Insurance Bureau of Canada.