As an experienced insurance broker and a SOLO operator in Ontario, I see a lot of misinformation regarding requirements for tenants and their tenant insurance policy. I will be answering some common questions I have come across.
For background, tenants insurance is not mandatory in Ontario like auto insurance is. The only way tenants liability insurance is compulsory or enforceable is if the landlord checked it off on section 11 in the Ontario standard lease. A contents insurance clause is not enforceable. With that in mind, I have created a checklist that can be shared with tenants explaining the three different coverages that any good tenants insurance policies have. Not only does it protect them, but it can also protect your investment and can make your claims process a lot smoother.
A good policy has coverage for Contents, Additional Living Expenses, and Liability Contents which include everything you own — even outside of your home
Tenants insurance covers the replacement, removal, or cleaning of your personal property in the event of a claim. It can also covers your contents when you are outside of your home. For example, a designer gym bag was stolen from your locker- along with your iPhone, laptop, and all of your gear. Tenants insurance would cover you.
Landlord Perspective:
After a claim, one of the first steps to start repairs is for the tenant to remove or dispose of their items. A tenants insurance policy would help cover this cost and would speed up the repair process.
Additional living expenses
This covers the cost of a place to stay while your landlord gets your apartment back in order. Tenants insurance can put a roof over your head. Plus, it can cover any additional costs associated to meals when you do not have a kitchen.
Landlord Perspective:
Tenants insurance would pay for accommodations for the tenant while the unit is uninhabitable. This means that repairs can be completed in a timely fashion, no need to work around the tenants schedule, and you do not have to pay for accommodations.
Liability coverage
Tenants insurance covers accidents that happen, despite our best efforts to prevent them. Sometimes you forget about a running bathtub, popcorn on the stove, or if your dog chews a slobbery hole in your landlord’s wall. With tenants liability coverage, you won’t be stuck paying to replace the damage to the rental. Liability coverage is a component of many tenant insurance policies, and it tags along with you wherever you go.
Landlord Perspective:
Tenants insurance would pay for the resulting damages of a tenants negligent act in your property. Your insurance company will subrogate against the tenants insurance policy and recover the cost of repairs. This protects your investment as well as reduces your loss ratio as you can recover money.
In conclusion, it is essential to educate your tenants and let them know that getting comprehensive tenants is necessary and is in their best interest. At a minimum, the policy should include coverage for Contents, Additional Living Expenses, and Liability.
If you want to learn more about our tenants insurance referral program for property managers and landlords, please visit our website tenants-insurance.com or email me at nick@ai-brokers.ca. We can add landlords and property managers as certificate holders, so you are notified if the tenants policy was canceled, lapsed, or non-renewed.
Nick Lopers, CIP, R.I.B(Ont.)
Sales Partner/The Landlord Insurance Broker
Ives Advantage Insurance Brokers Ltd.
Call & Text – 519-501-2625
Email: nick@ai-brokers.ca
