If you’re a renter, you’re not required to purchase homeowners insurance, but basic coverage could mean peace of mind, no matter the value of the property you own.
According to the most recent data from the Insurance Bureau of Canada, 37% of Quebec tenants are uninsured. If this is your case, this means that, in the event of a disaster (fire, water damage, etc.), your landlord’s insurance will cover damage to the building, but not the property you own.
To help you see things more clearly, Protégez-Vous called on Yves Lévesque, who has 35 years of experience in the insurance field, as a broker, agent, claims adjuster and trainer.
What does tenant insurance include?
Generally speaking, home insurance for renters (or renters insurance) covers your personal property and living expenses in the event of a loss. It also offers you civil liability protection if you are sued for bodily injury or property damage that you unintentionally cause to a person who does not live under your roof.
For example, if an unintentional fire breaks out in your home, you would be compensated to replace your damaged furniture and for your accommodation during the repair work. If you caused the fire in question and it resulted in damage to your neighbor’s home, your insurer would also pay for the repair or replacement of their property, thanks to your liability coverage.
“My insurance covers me everywhere in the world, both for movable property and civil liability,” notes Mr. Lévesque.
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I don’t have much money and nothing of value. Should I get insurance ?
Home insurance can be useful to you as a tenant, whether you have valuable property or not, according to Yves Lévesque. “If I’m rich, I want to protect what I have. If I have less money, I may have fewer possessions, but I also have less money to buy everything back in the event of a disaster, he says. In both cases, it’s useful for different reasons.”
To establish the value of the property you wish to insure, you can use the form from the Insurance Bureau of Canada (IBC). Keep in mind that we are talking about replacement value here. This means that you need to estimate what it would cost to replace your old sofa with a new one at the time of a loss, not what it is currently worth.
“Renters tend to underestimate the value of the property they own. Considering electronic devices (computers, cell phones and others), it goes up quite quickly,” argues BAC spokesperson Anne Morin.
When it comes to choosing which coverages to include or not in your insurance policy, Yves Lévesque advises you to take your personal situation into account. Protection against flooding is more useful if you live near a watercourse than far from the banks, while protection against sewer overflows will be more relevant for the tenant of a basement than for the tenant of a a third floor, for example. Similarly, $1 million in liability coverage may be sufficient if you live in a four-unit building, but insufficient if the building has 30 doors.
The simplest way to reduce the amount of your insurance premium without compromising your protection? Increase the amount of your deductible, that is to say the amount you will have to pay in the event of a claim.
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How much does tenant insurance cost ?
According to the most recent BAC data dating from 2023, the average annual premium for a Quebec tenant is $324, or $27 per month. In return, the BAC notes that the average cost of a claim during the same year was $7,834.
Around a third of the compensation paid by insurers to tenants in 2023concerned civil liability (34%), ahead of fire (29%) and water damage (13%). In the case of civil liability, these may be claims to replace your neighbor’s property which was damaged by water damage or a fire that you may have unintentionally caused, or to compensate a passerby who may have bitten by your dog.
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Can the owner of my building require that I be insured ?
If you sign a new lease, yes. The Corporation of Real Estate Owners of Quebec also invites its members to require formal proof of insurance from their tenants each year. That said, your landlord cannot force you to take out insurance during the lease if this requirement was not stipulated at the time of signing.
We are three roommates. Should we have three separate insurance policies?
No. “It makes more sense to have a single insurance, but one that includes the names of all the roommates,” explains Mr. Lévesque. The three roommates will thus be well covered and the total cost will be lower, because it costs less to take out one insurance at $45,000 than three insurances at $15,000.”
Please note: if you are insured, the members of your family (spouse, children) who live with you are also automatically insured.
