Revealed – the top tenant insurance providers in Canada
Read more: Tenant insurance in Canada – why the coverage gap?
“It’s important for renters to understand they are liable for damages to the rental unit and could potentially face steep expenses for repair costs,” Richardson told Insurance Business. “The main misconception is that renters think their personal belongings are covered under the landlord’s policy, and that is simply not the case.”
The poll also found that more than half, or 51%, of respondents admitted that replacing their belongings would be difficult without insurance, while only one in five said they could afford to replace most if not all their possessions even if they do not take out a tenant insurance policy.
“Insuring a home isn’t just for homeowners,” Richardson added. “It’s a savvy way for renters to protect their valued belongings and help cover potentially expensive replacement or repair costs when an accidental or unexpected loss happens.”
How does tenant insurance work?
Purchasing tenant insurance, also known as renters’ insurance, is not mandatory in Canada, but many landlords make it a condition of the rental agreement – and for good reason. Such coverage can go a long way in helping renters protect themselves and their possessions when disaster strikes.
About half of the respondents on TD Insurance’s poll said that their landlords are requiring them to take out renters’ insurance.
“Without tenant insurance, renters could be liable for damages to the rental unit and could face steep expenses for repair costs, in addition to the costs of replacing personal belongings,” Richardson explained. “Our hope is that Canadian renters take the time to understand the benefits of having a tenant policy. The incremental cost of a premium far outweighs the cost of replacing your possessions in the event of a major loss. It’s a relatively nominal investment to ensure the safety of your finances and personal effects.”
Read more: Do you need tenant insurance? Your top questions answered
What does tenant insurance cover?
Basic tenant or renters’ insurance policies typically include three different types of coverage:
Contents: This covers personal items such as clothing, furniture, and electronics. Some policies also provide coverage for belongings lost or damaged while outside the rental property, like a bicycle or a laptop for example, while some impose limits on valuable possessions, including jewellery and art collections.
Personal liability: This provides coverage when someone gets injured while in the rental property or the tenant accidentally damages the property. Policies typically cover up to $1 million in liability if a lawsuit is brought against the tenant, although the coverage amount can also be extended.
Additional living expenses: This pays for living expenses incurred if the tenant needs alternative accommodation while the rental property is being repaired. Coverage includes hotel bills, meals, and moving costs, but these are subject to limits.
According to Richardson, a huge part of the coverage gap is because many renters are under the impression that their personal belongings are protected under their landlord’s insurance. But in reality, this kind of policy covers the structure of the property and the contents the landlord owns within the premises such as furniture and appliances. It is up to the tenants then to take out coverage for their personal belongings.
Read more: Only 50% of renters know there’s affordable insurance tailored to their needs
How much does tenant insurance cost?
Several factors affect the cost of a tenant insurance policy, including the type of property and where it is located, how much the belongings are worth, the renter’s credit score (except in Newfoundland) and claims history, and other risks associated with the rental, for example, whether it is located in a flood-prone area.
Standard premiums range between $15 and more than $40 per month or $300 and $480 annually, based on the calculations of several price comparison websites Insurance Business checked out. Many of these websites also provide access to checklists and calculators to help tenants get an accurate estimate of the value of their possessions.
What are the best tenant insurance providers in Canada?
To find out which insurers in Canada offer the best affordable tenant insurance coverage, personal finance website moneyGenius compared policies and quotes from some of the country’s top renters insurance companies using a sample tenant of a one-bedroom apartment in Hamilton, Ontario. The hypothetical renter also has a high credit score and no prior claims.
However, moneyGenius noted that the rates below are for “illustrative purposes only,” adding that insurance quotes will likely vary depending on the tenant’s personal situation.
Read more: 10 reasons to purchase tenant’s insurance
These are Canada’s top tenant insurance providers based on the website’s analysis. The list is arranged alphabetically.
1. CIBC
Estimated monthly premium: $46.67
CIBC is one of the largest banks in the country. According to moneyGenius, unlike other providers in the list, which give tenants a range of coverage options for their policies, CIBC lets customers enter an estimated value of their belongings in a free-form format. It also suggests that clients provide an amount between $8,000 and $10,000 as the refund will be based on repair or replacement costs.
The bank’s tenant insurance coverage includes inflation-related adjustment, additional living expenses and loss of fair rental value, and voluntary compensation for residence employees. Jewellery and bike coverage, medical and funeral costs, and damage to property are optional extras.
2. Co-operators
Estimated monthly premium: $44 (New Brunswick)
Because quotes for the Hamilton apartment were unavailable, moneyGenius used a New Brunswick address instead, resulting in a slightly raised monthly premium. Co-operators provides two types of policies – Classic and Prestige. Classic coverage includes all kinds of perils, personal liability, identity fraud, personal property, moving personal property, dishonesty to others, and lock replacement or re-keying. Prestige policies cover everything under the classic plan, as well as additional perils such as unintentional damage.
Estimated monthly premium: $46.67
Desjardins has the exact same insurance portal as CIBC did, but with a slight colour scheme change, according to moneyGenius. The insurer offers the same coverage as the banking giant does and provides similar rates.
4. RBC
Estimated monthly premium: $40.59
Canada’s biggest bank RBC offers tenant insurance policies that cover personal belongings, liability, and additional living expenses. Optional coverage includes sewer backup, overland water, identity theft, and jewellery, which is subject to a special limit. Policyholders can also opt for a disappearing deductible to save on premiums.
5. TD Insurance
Estimated monthly premium: $40.33
TD Insurance’s tenant policy has a $30,000 limit for possessions, $15,000 for additional living expenses, $1 million for personal liability, and $30,000 for extended water damage for a $1,000 deductible. Renters can also add optional extras easily. These include coverage for earthquake damage, identity theft recovery, bikes and non-motorized watercraft, wine and spirits, jewellery, artworks, and additional liability, as well as claims forgiveness.
6. Scotiabank
Estimated monthly premium: Undisclosed
Scotiabank, another Canadian banking giant, does not disclose insurance quotes online. It does provide, however, a range of coverage options, which include repair and replacement costs of damaged belongings, $1 million or $2 million in personal liability, and high-value items such as jewellery. It also offers an all-risk policy covering accidental damage to the rental property, voluntary medical expenses, or essential upgrades to the home.
7. Sonnet
Estimated annual premium: $41.76
A fully digital insurance provider, Sonnet allows tenants to customize the coverage amount for standard coverage, which includes belongings, personal liability, expenses after a loss, and deductible. Cover for damages caused by sewer backup, overland water, earthquake, and full hail can also be added.
8. Square One
Estimated monthly premium: $25.69
Square One offered the cheapest tenant insurance policies among the insurers moneyGenius analyzed, although rates may increase depending on the level of coverage, which renters can customize. Among the commonly covered losses are burglary or theft, inland flood, fire, water back-up, and hail and wind damage. Coastal flooding, war and terrorism, landslide, nuclear contamination, repeated leakage, and wear and tear are the typical exclusions.
How can Canadian renters make the most out of their tenant insurance?
Although tenant insurance is among the most affordable types of coverage to have, there are still ways to save on premiums. Here are some practical strategies that renters can employ to cut down costs.
Shopping around and comparing quotes
Increasing the deductible, or the amount paid out of pocket, but to an affordable level
Opting for annual payment instead of monthly instalments
Getting only the necessary coverage
Bundling tenant insurance with auto policies
Consenting to a credit check when asked
Keeping an up-to-date inventory of personal belongings
“Scheduling” the most important and irreplaceable possessions such as engagement rings, family heirlooms, and original art pieces
If possible, choosing a safe neighbourhood to live in
“Protecting personal property that often can be expensive to repair or replace makes sense for homeowners and renters alike,” Richardson said. “As we continue to move through this… pandemic, personal electronics like mobile phones and laptops have become incredibly important to staying connected with friends, family, the workplace and they’ve become some of our most valued possessions.”
