A question we often hear from first-time landlords is “should I require my renters to have tenant insurance?” If you can write it into your lease, yes. Tenant insurance is an affordable way to ensure that your renters are covered in the event that something happens to their personal belongings and protects them from personal liability. It also gives landlords peace of mind, since it’s one less thing they’ll have to worry about if the worst ever happens. If you’re a landlord who’s considering requiring your Toronto renters to have tenant insurance, here’s what you need to know.
Is tenant insurance required in Ontario?
No, tenant insurance isn’t required by law in Ontario. In many situations, however, Ontario landlords will write the requirement for tenant insurance into their lease agreement. These clauses require that renters obtain insurance prior to moving into a unit – failure to do so will result in a violation of the agreement.
What are the benefits of having tenant insurance in Ontario?
While it’s not legally required, it’s highly recommended that all Ontario renters obtain tenant insurance to protect themselves and their personal property. When a tenant’s property is damaged by other renters or outside forces, tenants are expected to repair damages and replace their own property.
If landlords cause damage to a tenant’s property, they’re expected to pay for the damages or face potential lawsuits. Tenant insurance ensures that renters can claim the contents of their unit in the event that something disastrous happens, ensuring that they won’t have to pay out of pocket to start over again. It is advantageous to landlords as many first-time renters are under the mistaken assumption that the landlord’s insurance will cover their contents in the event of a fire or other insurable event. If something does happen, the landlord won’t have to worry about the relationship with the tenant souring over a misunderstanding if the tenant has insurance.
What does tenant insurance cover?
One of the best things about tenant insurance is that it covers so many important things. First and foremost, tenant insurance can be used to cover the contents of a unit up to a specific amount set by the renter. If a renter has $25,000 worth of belongings in their unit, they can pay a set amount to ensure that this is covered in the event that something happens to their personal property. For those who have one-of-a-kind items or specific items with a high value, renters can also take out riders to ensure that the full value of those individual items are covered. Examples of items you may need riders for are expensive jewelry or high-end photography equipment.
Another major benefit of having tenant insurance is that it protects Toronto renters from liability in case somebody is accidentally injured inside a unit or on the property. Normally, renters would be liable for this kind of incident and could be expected to pay financial penalties that might come with an accidental injury. With tenant insurance, renters are protected in the event that they get sued for an injury which occurred on the property, with liability limits covering up to millions of dollars in liability.
Finally, renters insurance can be used to cover the additional living expenses incurred by property damage caused by things like fires and floods. Rather than tenants paying out of pocket to live in a hotel until repairs or renovations can be completed, tenant insurance covers these living expenses, including temporary rentals or hotel fees and the cost of meals. This way, tenants can continue living with minimal interruptions to their daily lives until they can return to their rental unit.
How much does tenant insurance cost?
The best part of tenant insurance is that it’s an extremely cost effective way to protect renters. For as little as $20 per month, renters can rest easy knowing the contents of their rental unit are covered, that they’re covered for liability in the event that somebody else is injured on the property, and that they’ll be able to continue living with minimal interruption in case they’re temporarily displaced.
The low cost of tenant insurance makes it easy for Toronto landlords to write this requirement into their future tenant agreements, as renters will not be faced with extremely high insurance costs. While tenant insurance is generally for the benefit of renters, it can also go a long way in providing peace of mind to tenants. Rather than worry about what you’d do if something went wrong, you can take solace in knowing that your tenants will be covered if a “worst case scenario” were to happen.
Being a landlord can be an extremely rewarding experience, but many Toronto landlords find that there’s just never enough time in the day to take care of everything they want to. That’s where HighGate Properties comes in. HighGate is a leading provider of Toronto property management services, taking care of things like tenant screening, maintenance, inspections, and more so that you can take care of the more important things in your day-to-day life while still enjoying the many rewards of being a landlord. To find out more about the residential and commercial property management services offered by HighGate Properties, get in touch with our team today.