How much is renters insurance in Ontario?

If you're crafting your first budget and making plans for spending and saving, one of your monthly expenses likely includes a tenant insurance policy. Whether you're a first-time renter or have previously been renting without insurance coverage, you may have questions surrounding the cost of tenant insurance in Ontario.

Renters insurance is a type of home insurance specifically designed for tenants. So, how is tenant insurance calculated? Are there ways you can save on your tenant insurance in Ontario?

To learn more check out KOHO's guide to tenant insurance rates down below.

How much does a tenant insurance policy cost in Ontario on average?

One of the factors that insurance providers take into account is location, given that each neighbourhood has its own set of risks. For example, because Toronto is a major city in Ontario, the cost of insuring someone living in a metropolitan area is generally higher than that of a smaller community like Kitchener.

So, depending on where you live in Ontario, you can expect to pay between $190 and $400 a year for renters insurance on average, which works out to be between $15 and $35 a month. Again, this is just an estimate and your actual tenant insurance rate will depend on your unique circumstances, which is why we recommend getting a personalized renters insurance quote from insurance companies before settling on a plan.

What influences the cost of tenant insurance policies?

Like we said, now that you know the average tenant insurance cost, you're probably wondering, "how is homeowners insurance calculated in the first place?" Like all the types of insurance out there, the cost of tenant insurance will vary depending on your unique personal circumstances.

That said, there are a couple of factors your insurance provider will consider when determining how much it will cost to insure you:

The value of your personal belongings

Those with high value items like expensive jewellery, musical instruments, electronic devices, luxury clothing, and other belongings may be viewed as higher risk by tenant insurance companies than those with less items as it will cost them more to reimburse you for damages in the event you file an insurance claim.

Where you rental unit is located

Like we briefly touched upon, where your rental property is located will also impact how tenant insurance providers charge you for coverage. For example, if you live in an area that frequently experiences severe weather patterns or natural disasters, higher crime rates, or other risks, you'll likely have to pay a bit more for your tenant policy than others.

The deductible amount you opt for

The contents insurance policy included in your overall renters insurance requires policyholders to pay a deductible, which is an out of pocket payment before your insurance pays for the rest. Opting for a higher deductible can help you save on your premiums, but this isn't always the best option for everyone.

Only choose a more expensive deductible if you can comfortably afford to pay said amount in the event you need to file a property damage claim under your existing policy.

Whether you opt for additional coverage

Standard tenant insurance includes coverage for your belongings, liability, and additional living expenses. That said, add-on policies are available if you want more protection. Keep in mind that this will increase your monthly premium.

Your tenant insurance claims history

If you've previously purchased tenant insurance in Ontario and have a long insurance history with numerous claims on your record, insurance companies will deem you more of a risk to cover than those with little to no claims filed. This is because every time you file a claim with your insurance company, they will need to pay for repairs, replacements, and any other expenses. In other words, the more you cost your insurance provider, the more of a risk they'll deem you.

Your credit score

It's important to note that not all insurance providers perform a credit check on customers. But when they do, having a higher credit score can yield lower premiums. If you want to build your credit with KOHO, you may want to check out a virtual credit card, which can help you improve your credit history and score over time.

Looking for a free credit score check before you purchase personalized renters insurance? KOHO has got you covered. You can even purchase credit card protection insurance as an extra security blanket for months down the line where you may forget to pay off your minimum balance.

The coverage limits you select

The personal liability portion of your tenant insurance policy requires you to choose your level of coverage in the event a third-party claim is filed against you. Liability insurance typically begins with $100,000 in coverage and can go up to $2 million. The higher policy limit you choose, the more you'll pay in the end for your premiums.

Who you live with

If you live with rooms or pets, your insurance premiums may also increase. For example, having pets, especially high-risk breeds, may require you to purchase more liability coverage. You could also have a more expensive monthly bill if you live with more people in your space, as providers typically consider this to be more of a risk than living alone.

How can I save money on tenant insurance in Ontario?

Now that you have a better idea the average cost of renters insurance in Ontario, we've put together a list of tips and tricks you can use to find the right protection without paying a fortune:

Bundle your tenant insurance with your auto insurance

If you already have car insurance and other insurance coverage, you may be able to bundle and save by purchasing tenant insurance from the same insurance company. Most companies offer discounts to customers who purchase more than one policy for them.

Work with an insurance broker

Think of an insurance broker as a friend there to give you unbiased advice throughout your experience. Working with one gives you the ability to shop around and obtain tenant insurance quotes from various providers. By doing so, you can compare coverage options and rates before landing on one you feel confident in.

Ask about applicable discounts

What a lot of people don't know is that insurance companies often offer numerous discounts that you may qualify for. Whether it be for bundling your policies, or installing safety features in your home like burglar alarms, don't be afraid to ask an agent or broker about what savings are out there.

Consider your deductible amount

Another way you can save on your renters insurance is by increasing your deductible. Again, keep in mind that you should only do so if you're able to comfortably afford to pay more out of your own pocket if you need to file an insurance claim in the future.

Pay for your tenant insurance policy upfront

Instead of paying for your tenant insurance monthly, you can save money on administration fees by paying for your coverage all up front by making a one-time payment.

What does tenant insurance cover?

Still unsure whether renters insurance is right for you? Take a closer look at some of the benefits you can experience when you purchase coverage for yourself:

Contents insurance coverage

The contents coverage portion of your renters insurance provides policyholders with financial support in the event their belongings are damaged by fire, natural disaster, or other insured risks stated within your policy. Rather than having to pay out of pocket for any repairs or replacements of items, contents coverage only requires you to pay your deductible before your insurance kicks in and pays the rest, possibly saving you hundreds to thousands of dollars in expenses.

Personal liability coverage

Personal liability coverage is another crucial aspect of renters insurance and prevents you from being held legally responsible in the event someone injures themselves on your property, or you cause unintentional property damage to a third-party.

With liability coverage, any medical expenses, legal fees, repairs, and other fees that arise from a third-party claim will be covered by your insurance up to your policy limits.

Additional living expenses

In the event your rental is damaged to the extent that you are no longer able to safely live there, additional living expense coverage will cover the cost of your accommodations, meals, and any other expenses listed in your insurance policy.

Optional tenant insurance policies

Beyond standard renters insurance, there are additional coverage options you may want to consider as an added security blanket. Keep in mind that these add-ons will cost an additional fee on top of your basic policies:

Identity theft

Let's say someone breaks into your rental and steals your personal information, such as your social security number, driver's licence, birth certificate, passport, banking information, and more, with the intention of committing criminal acts. With this insurance, expenses related to recovering your information and replacing your documents.

Sewer backup insurance

If you live in a basement suite or area in Ontario that experiences heavy rainfall throughout the year, you may want to consider adding sewer backup insurance to your overall tenant insurance portfolio. Raw sewage and water can significantly damage your belongings and leave you without a place to live.

With this coverage, the cost to repair or replace your items will be covered, along with any additional living expenses incurred during the period where you are unable to live in your home.

Overland flooding

If you live near the Great Lakes in Ontario, your rental is at risk of experiencing water damage from overland flooding. Typically, a standard renters policy does not include water-related damage, which is why adding overland flooding insurance to your portfolio can come in handy.

If you're considering additional coverage, make sure to get numerous tenant insurance quotes and compare offerings from one provider to the next!

Is getting the cheapest tenant insurance a good idea?

If you're in a rush and you think you should get insurance early before doing your research to find the right protection that fully meets your unique needs, you might get caught up in the idea that the cheapest options are the best.

In reality, this really isn't the case. The best thing you can do when buying tenant insurance is shop around and get a different personalized renters insurance quote from various providers. Then, take into consideration what each provider is offering and whether you can afford it. The key is to find a balance between affordability without compromising on protection.

Is tenant insurance mandatory in Ontario cities?

So, is home insurance a legal requirement in Canada? The short answer is no. But there's a catch.

While renter's insurance and home insurance may not be a legal requirement in Ontario, or the rest of Canada for that matter, your landlord could ask that you purchase tenant insurance as a requirement in your lease agreement.

If you're still contemplating, "Do I need renters insurance in Canada?" Here's what you need to keep in mind: While this does add an extra expense to your monthly bills, tenant insurance can realistically help you save thousands of dollars in repairs, replacements, and other expenses should the unthinkable occur. When it comes to protecting your interests and finances, renters insurance really is invaluable.

Get affordable tenant insurance with KOHO

Having tenant insurance is meant to provide renters with peace of mind, knowing they're covered in the event something happens to or at their property. To ensure that your financial health remains intact when purchasing renters insurance, consider opening a high-interest savings account with KOHO and overdraft protection while you're at it! Life happens, but with the financial resources and security offered by KOHO, you can take on any challenge with confidence.

That goes for business owners as well! Learn more about KOHO for businesses--we offer numerous resources and financial products that every business owner may find helpful.