Tenant insurance Newfoundland

While getting insurance coverage can seem like an unneeded additional expense for Canadians, when it comes to tenant insurance, the small cost you pay each month can make a world of difference in the event something unexpected happens to your rental unit.

So, what exactly is renters insurance? And why should you consider this type of coverage if you live in Newfoundland? Take a look through our comprehensive home insurance guide below.

What tenant insurance covers

Tenant insurance is a type of home insurance that is specifically designed to protect policyholders from the unique risks associated with living in a rented property. Within all standard tenant insurance policies, you'll find the following coverage:

Liability insurance

Liability protection is one of the most important aspects of tenant insurance as it protects your finances and interests in the event someone files a lawsuit against you for bodily injury or property damage that occurred in your rental home.

For example, if someone slips and breaks their leg on your new rug, you could be held responsible for the resulting damages if a liability lawsuit is filed. Luckily, a liability insurance policy, regardless of whether you're found at fault or not, will cover the cost of legal fees, medical costs, settlement funds, and other expenses that may arise as a result of liability claims up to your coverage limits.

Contents coverage

You work hard for your personal belongings, which is why tenants insurance has a policy that specifically covers your personal property should they become damaged or stolen as a result of a covered event that is listed in your coverage. Most commonly, contents coverage will cover the cost of repairs or replacements of your personal possessions that result from vandalism, theft, and fire damage.

Additional living expenses

Now, let's say that your rental unit suffers damage due to an insured loss, such as fire damage that renders your unit uninhabitable. Without your own insurance, you would have to cover expenses, accommodations, meals, and other associated fees that incur during the time when you are unable to live in your rental home. It goes without saying that these costs can add up quickly and put a damper on your bank account, even if you've been making an effort to save up for the unexpected.

This is where your additional living expenses insurance policy comes into play. Your tenant insurance will cover the cost of a hotel room, meals, and any other additional living expenses that arise during this period of time when tensions are high and your rental unit has suffered property damage. Again, this saves you from having to pay out of your own pocket.

Optional tenant insurance coverage

Beyond basic tenant insurance, renters in Newfoundland are able to purchase additional protection to supplement their overall coverage. Here's a closer look at some of the different types of insurance add-on you may want to consider:

Overland flooding insurance coverage

If you live near the coast or close to one of Newfoundland's many rivers or lakes, you may want to consider adding overland flooding insurance to your policy. This type of tenant insurance protects policyholders in the event their personal belongings are damaged due to overland flooding.

Most standard tenant insurance does not provide coverage for most types of water damage. However, having this insurance policy can help you protect your belongings should periods of heavy rainfall, melting snow, or other weather events cause local waterways to flood into your area.

Identity theft coverage

Imagine your property is broken into while you're away for the weekend. When you arrive back at your property, you notice that some of your items are missing. Whether it be your birth certificate, social security card, banking documents, passport, or other personal identification information that's stolen during the break-in, identity theft tenants insurance will compensate you so that you can recover or repurchase your personal items.

Sewage backup insurance

Living in a basement apartment can have its perks, but it can also put you at risk of sewage backup, especially during periods of heavy rainfall. Luckily, this insurance covers your personal belongings if they are damaged as a result of sewage backup. If you live in a basement, older unit, or home that does not have a sump pump or backwater valve installed, this coverage is something you'll want to consider.

high-value personal property insurance

Prized possessions like jewellery, sports equipment, musical instruments, artwork, and other high-value items may not be fully covered under contents insurance, which is why high-value property insurance can help bridge this gap in coverage and ensure that your items are fully protected under your tenants insurance.

What renters insurance doesn't cover

Now that you have more information about what renter's insurance in Canada covers, it's important to note that there are some scenarios in which insurance companies don't consider an insured loss. Knowing these can help you get a better idea about whether more coverage is needed for your unique renting needs:

Pest infestations

Pests--whether they be bed bugs, ants, rats, flies, or other types of vermin--will not be covered under your insurance policy. Typically, your insurance company will view infestations as a maintenance issue that is preventable, rather than something that occurs unexpectedly. Because of this, your landlord is responsible for dealing with any repairs and preventative measures moving forward.

Water damage

As we briefly mentioned, water damage is typically not covered under standard tenant insurance unless the damage occurred as a result of something that was deemed unexpected or unavoidable. For example, if you leave your tap running and accidentally damage your bathroom, your tenants insurance will not provide coverage. On the other hand, a pipe bursting and causing damage to your home may be covered.

Criminal activity or intentional acts

And, of course, this one shouldn't come as a surprise, but any criminal or intentional acts that cause damage to your items or bodily injury to a third party will not receive coverage under any type of insurance.

How are tenant insurance premiums calculated?

If by chance, you're finalizing your plans for spending and saving you may have some questions about how tenant insurance premiums are calculated. Most insurance companies will use several factors to calculate the cost you'll pay for coverage, including the following:

Where your rental property is located

Here, your property is located in Newfoundland, which will play a big role in your coverage. Some areas of Newfoundland are more prone to flooding, other common risks, and crime rates than others, which insurance advisors will use to determine your risk level.

Your previous tenant insurance history

Your claims history is also something that's considered. If you have numerous tenant insurance claims on your file, your insurance provider may deem you a higher risk to insure, which will translate to higher coverage costs.

Your credit score

As a disclaimer, not all insurance providers will use your credit score to calculate premiums. That said, when they do, having a higher score can work in your favour.

If you want to build your credit with KOHO, consider opening a virtual credit card and getting a free credit score check to stay on top of your credit game. Having a healthy credit score can make a world of difference in the future if you ever need to apply for a mortgage, car loan, and more!

Your coverage limits

Having higher coverage limits for your tenant insurance will cost extra, given that you'll have more leeway in terms of your liability coverage if a third party files a claim against you or if your personal property is damaged or stolen.

Am I legally required to have Newfoundland tenant insurance?

You may be thinking, is home insurance a legal requirement in Canada? The truth is, no home insurance in Canada is mandatory, meaning that renters insurance, your landlord's insurance, and standard homeowners coverage are all optional. However, that's not to say that they aren't highly recommended and beneficial.

When you put costs into perspective, having a tenant insurance policy to protect your personal property and interests is a small price to pay compared to having to replace all of your property or defend yourself in court out of your own pocket.

What is the difference between landlord's insurance and renters insurance?

Tenant and landlord insurance often gets confused as the same thing when they couldn't be more different. Basically, landlord insurance is meant to protect the physical structure of the rental home and protect the interests of the landlord in terms of personal liability, should anyone injure themselves or cause property damage to a third party. It does not extend to tenants.

On the other hand, renters' insurance offers personal liability coverage to tenants and covers their personal property if it is damaged due to an insured event. Ultimately, while both coverages serve the interests of different parties, the main goal of each is to ensure that all individuals are protected in the event something unexpected occurs.

How can I save on my renters insurance policy?

If you're trying to cut back and save on monthly expenses, there are ways you can potentially lower your tenant insurance premium at the time you purchase your coverage. Here's a couple of things you can do:

Bundle your home insurance and auto insurance

If you already have auto insurance, consider bundling your current coverage with your tenant insurance. Most companies offer a bundled discount to customers who have more than one policy with them.

Ask about discounts

Speaking of discounts, you may also qualify for additional savings through your provider. Oftentimes, there are discounts for installing security cameras on your property, being a member of a professional organization, and more. So, don't forget to ask your provider when you get a quote for your coverage.

Pay for your renters insurance upfront

If you can comfortably afford to do so, consider paying for your tenant insurance upfront rather than monthly. Insurance companies add administration fees to those who pay on a monthly basis, given that they need to process each payment. So, by paying upfront, you can essentially remove these added fees and save on your insurance.

Shop around

Don't forget to shop around and compare quotes from different providers. All companies have different pricing scales, and shopping around can help you secure an affordable deal. Just keep in mind that the cheapest option out there isn't always the best choice. Remember to find a balance between affordability and protection.

Increase your deductible options

Lastly, you may want to consider opting for a higher deductible. The deductible is the amount you pay at the time you file a claim before your policy covers the rest. By opting for a more expensive deductible, you're essentially eliminating some of the burden from your provider, which can result in more affordable rates for you.

Just keep in mind that you should only consider this as an option if you can afford to do so and are comfortable with potentially paying higher costs in the event you need to file a claim in the future.

Get affordable tenant insurance with KOHO

Having insurance can help give renters in Newfoundland peace of mind, knowing their finances and interests are protected against unforeseen risks that come along with renting a property.

At KOHO, we're here to answer questions about coverage and help you get a plan that fits your needs. Whether you want to learn more about the advantages of prepaid cards, other financial topics, take a peek through our resources for more information.