Unpacking Renter’s Insurance for Newcomers to Canada

For those of you who are new to Canada in particular, renter’s insurance can offer additional financial protection and peace of mind during a period of immense change. You’ve moved yourself, your family, and your belongings and valuables to a new country. And while it’s exciting, it’s also a period where you are a little more vulnerable, since you’re unfamiliar with exactly how Canada operates. Renter’s insurance can help you to reduce some of the risks you face in your new home. 

What is Renter’s Insurance?

First things first, let’s dig into what renter’s insurance is and what it covers.

Renter’s insurance, also known as tenant’s insurance, is coverage that can protect you and your family financially from personal liability and may cover your belongings for repair or replacement in certain situations. It’s like a homeowner’s policy, except it does not cover the building (since that’s your landlord’s responsibility).

Renter’s insurance protects your belongings from covered risks, like theft, fire, and water damage. While this coverage may cover the cost to repair or replace your damaged belongings, it also offers financial protection from personal liability for you and your family. We’ll explain this further below.  

Importantly, renter’s insurance also offers security if you’re forced to leave your rental property because it becomes uninhabitable. For instance, if your hot water tank fails and floods the property, your renter’s insurance may cover your living expenses while repairs are in progress. So, if you and your family are displaced, you have the peace of mind that you can meet their basic housing needs without sacrificing your financial goals. 

Understanding Renter’s Insurance Coverage

As we outlined above, renter’s insurance doesn’t just cover the things you own. While it’s important to make sure you could afford to replace your food, clothing, furniture, and other essential items if they were stolen or damaged, renter’s insurance can also include other valuable protection. 

Here’s what you need to know: 

Contents Coverage

Your contents coverage pays the cost of repair or replacement for your damaged belongings, up to a certain limit and excluding special items. This coverage only applies to specific covered events, like fire, water damage, and theft. (Your policy lists the exact coverage and you would need to read it to work out exactly what is covered.) 

This coverage might be more valuable than you think, since many of us underestimate how much it would cost to replace the things we own. To make the most of your contents coverage, you should create and keep an up-to-date list of everything you own, plus the cost to replace it (with photos of your receipts for high value items). 

Contents coverage doesn’t include coverage for things that come with the rented property, like carpet, or window coverings. Those items are all covered by your landlord’s policy. So, if something happens to them, you should let your landlord know. 

Personal Liability Coverage

Personal liability coverage may protect you if you injure someone else or their property. While it forms part of your renter’s insurance policy, it covers you outside of your home too. 

These are some of the situations that personal liability coverage could offer financial protection: 

• Your toddler left his toy trucks on the stairs. A friend of yours visits and falls down the stairs after tripping on the toy. Your friend breaks their arm and is no longer able to continue in their career as a countertop installer. 
• A stranger’s child comes over to your dog and starts pulling its tail, and your dog bats the child away, unfortunately scratching the child’s eye in the process. 
• You’re grocery shopping and you accidentally run your cart over someone’s foot in the parking lot. 
• A friend comes over to your house and you knock a cup of freshly brewed coffee off the counter and into your friend’s bag, damaging their personal laptop, phone, and tablet computer. 

These accidents are not things that your landlord’s insurance would cover. So if you didn’t have renter’s insurance, these little accidents could be expensive. 

Your personal liability coverage can be as high as $2 million.

All-Risk Coverage

All-risk coverage offers protection beyond the basics. The coverage is typically flexible and customizable but may include coverage for things like accidental damage to the rental property or voluntary medical expenses if a visitor is accidentally injured while on the property. 

Special Items Coverage

Renter’s insurance policies often have a limit on the coverage offered for your belongings. For example, bicycles might be covered up to $1,500, or jewellery might be covered to $700. (The limits will vary depending on which insurer you choose and other factors. These figures are examples of what the limits might be.)

The limits vary depending on a few factors, but here’s how they operates (in theory): If the limit for sports equipment is $1,000, and your skis cost $1,500, you will either need to insure the skis as a special item for $1,500 (which may increase the amount you pay for your insurance) or you will receive $1,000 for the skis if they are stolen from your home. 

Any items you own that are more expensive than the coverage limit will need to be covered as a special item on your policy. So, if you own a $10,000 road bicycle, or a $5,000 camera, or a $15,000 engagement ring, these items insured as special items to have full coverage. 

Your renter’s insurance coverage may cover your contents and special items outside of your home too, including while you travel. So, if your bicycle is stolen off the back of your car while you sip coffee downtown (or in Italy), renter’s insurance may cover the cost of a new bicycle.

Why Is Renter’s Insurance Important for Newcomers to Canada? 

There are many important reasons you should consider renter’s insurance if you’re renting a home in Canada: 

Lower The Financial Risk of Accidents

Accidents are a part of life. But, unfortunately, the cost of an accident can be quite high in Canada if the injured person sues you. Renter’s insurance decreases the financial risk of accidents by covering the legal costs to defend yourself in the lawsuit and any payout to the injured person (up to your limit). 

This aspect of insurance can be so critical for newcomers. Canada’s legal system is complex, and trying to navigate it (and pay for lawyers) can be stressful and expensive. Renter’s insurance offers peace of mind and financial protection from the cost of unforeseen accidents. 

Your Landlord May Require It

Many landlords will ask you to have your own renter’s insurance policy if you want to rent their property. This is increasingly common in Canada, and Canadian Underwriter suggests that around 49% of landlords will require you to have a renter’s insurance policy.

Even if your landlord doesn’t ask for renter’s insurance, having a renter’s insurance policy can help to strengthen your rental application. It can show the landlord that you are a responsible tenant, which may be helpful given how competitive it can be to find a rental property in Canada. 

Costs of Living If You’re Forced Out of Your Home

The costs of living add up if your rented home becomes uninhabitable. You may need to pay for hotels or a short-term apartment rental, as well as new clothing, food, and more. The financial burden of these costs can be high, and you will need to pay them since your landlord will likely only have to reimburse you for the rent paid. This can seem unfair, especially if the reason you had to leave the rented home isn’t your fault. Renter’s insurance can ease the financial burden during this stressful time by helping to cover your costs of living. 

Build Your Claims History

• This one is particularly important for newcomers to Canada. 

Insurers in Canada want to know about your insurance history. You will usually be asked if you’ve made any claims in the past, how long you have held policies in Canada, and similar questions when you take out an insurance policy. Your answers to these questions will impact how much your insurance policy costs – or if you can buy a policy at all.

The good news for newcomers to Canada is that renter’s insurance is usually less expensive than similar policies for homeowners. This is because your policy does not need to cover the entire building. 

Help During Stressful Periods

Your renter’s insurance policy can give you access to 24/7 assistance in case of a claim. This means there will always be someone available to help you make sense of your policy and help you with filing your insurance claim, which is especially helpful when you’re new to Canada. 

Your Belongings Are Covered While Travelling

If you’re new to Canada, there’s a good chance you will want to travel abroad to visit family or friends at some point. Helpfully, your renter’s insurance policy offers some protection for your belongings while you’re travelling. 

Protection From Natural Disasters

Canada can experience severe weather, including wildfires and hurricanes. Your renter’s insurance policy may cover the cost to replace or repair your belongings after a natural disaster, freeing you up to focus on yourself and your family if an emergency strikes. 

How Much Does Renter’s Insurance Cost?

Moving to Canada is expensive, and so is renting a home in many parts of the country. Fortunately, renter’s insurance is usually affordable. 

The exact cost of your policy will vary depending on your unique circumstances, such as where you live, and the level of coverage you choose. But a typical renter’s policy costs less than $50 per month – often much less. In fact, some renters are able to get insurance coverage for $20 or less per month. 

Renter’s Insurance from Scotia Insurance^®

Scotia Insurance offers flexible Renter’s Insurance policies that protect your home and belongings from the unexpected.

Some of the benefits of Scotia Insurance renter’s insurance policies are: 

• They are customizable, so you are able to get the right coverage for your needs.
• 24/7 claims service, so you can access claims advisors whenever you need them. 
• Flexible payment options.

Get your free quote from Scotia Insurance and protect yourself, your loved ones, and your belongings in your new home.