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Tenants Insurance

Some tenants who are renting or leasing their residence mistakenly think that they will be covered by their landlord’s insurance policy in the event of loss or damage of their possessions. In fact the landlord’s policy only covers the building and not your personal items or liability.

Most tenants’ policies provide liability protection if someone injures themselves while in your unit. If the person sues you, you are covered up to your policy’s limit for your legal expenses and the amount they are awarded by a court.

Tenants’ insurance covers most personal possessions such as furniture, clothing, shoes, electronics, small appliances, toys and computer equipment. You are covered for loss or damage of items due to theft, vandalism, fire, smoke and lightning, wind, damage caused by aircraft and vehicles, falling objects, malfunction of the building systems and equipment such as plumbing, furnaces or air conditioning. To be covered for damage or loss due to flooding or earthquakes you will need to take out additional coverage for these events.

Tenants’ insurance generally provides some coverage for items that are often moved out of your unit, such as golf clubs, musical instruments, camera equipment and bicycles, but you may also want to consider additional floater policies to provide further protection to these items. The amount of coverage per item is limited, so you should consider adding riders with additional premiums for particularly valuable items, such as jewellery, collectibles, fine art, antiques and expensive electronics.

If your possessions are destroyed in a fire or other disaster, the insurance company will require you to provide documentation of your losses. The more proof you have, the easier it is to establish your claim. It is a good idea to make an inventory of your possessions, room by room, including the manufacturer, brand name, serial number, date and place of purchase, and update this inventory regularly. You can make a video of the inside of your unit, take pictures of open drawers, open closets and special items. Keep receipts, appraisals and warranty cards. Keep the inventory, home contents video and photographs off-site. Do not throw away badly damaged items until an adjuster has seen them.

Be aware that different insurance policies will reimburse different types of items in varying ways. “Extended replacement coverage” will pay for items according to what they cost today, although some items may still be subject to depreciation. “Actual cash value” will cover you for the cost of replacement minus depreciation. Premiums and coverage will vary between insurance companies. You can usually lower your premiums by agreeing to higher deductibles.

When choosing tenants’ insurance, make sure that the coverage is adequate for your needs, your special items are specifically scheduled and that you are satisfied with the type of coverage, whether extended replacement or actual cash value.