Housing costs have made the prospect of owning a home less of a viable option for residents in Greater Vancouver. Many households are opting to rent. While tenancy comes without some of the headaches that owning a detached home or condo does, it does have its unique set of concerns. Insurance and liability are among them. This is not exclusive to the renters’ market of Vancouver BC. Canadians across the country are struggling to understand the ins-and-outs of tenancy and insurance. Today, we intend to clear it all up for you.
6 Things that Renters Need to Consider Before Buying Tenant Insurance
1. Tenant-Inflicted Damage to the Property
The biggest concern faced by many renters is personal liability. Loss and/or destruction of your own possessions are one thing. Damage to the owner’s property is another. If you or anyone in your household (child, partner, pet, etc.) is negligent and damage to the property and/or neighboring properties ensues, you could be held legally responsible. This responsibility also encapsulates necessary medical expenses for injuries to neighbors and onsite staff (condo concierge, security, etc.). You need to make sure that your policy covers you accordingly. As with all types of insurance, it is important to learn both what is and what is not covered by your policy. For example, coverage is not provided for damage from vandalism or normal wear and tear.
2. Legal Expenses from Damage to the Property
Less than clear-cut cases regarding tenant negligence (or lack thereof) may place you in court. You need to consider the cost of an attorney for consultation and defense. The right policy will cover the cost of legal representation and will settle a judgment against you, up to the limits of the policy. All policies will include some exclusions, such as vandalism, so review your policy to learn what is covered.
3. The Cost of Temporary Relocation
Renters understand that their insurance policy should cover damage to the property and loss/damage of their possessions. However, one consideration that is often overlooked is the potential for relocation. If there is a fire or significant water damage, your household will have to vacate until repairs are made and the property is deemed fit for occupancy. Unless you have family in close proximity, your life may be flipped upside down, especially if you can’t afford to pay for temporary accommodations. You will need an insurance policy that covers the relocation and additional living expenses that your household might incur so that you can continue a normal standard of living.
4. Coverage for Other Uses of the Property
Do you have a home-based business? If so, any loss, damage, or theft can prevent you from conducting further business. You need coverage to consider computer hardware and software, materials, merchandise, packaging, and everything else that goes into moving your product or service.
What if your business offering is less tangible? For example, a professional artist can easily account for the cost of blank canvases, paints, and materials, but when it comes to valuation of their finished works it becomes a lot more complicated. In such cases, an intensive conversation with a trusted insurance broker is imperative.
Loss, damage, and theft can also have a very real impact on your income. The time it takes to replace your wares can cut into your revenue stream and prevent you from maintaining not only your day to day business, but your standard of living too. Simply put, if you manage a home-based business as a renter you must talk to a broker about it today.
5. Appraisals for Unique Possessions
It’s easy to place a value on a TV, furniture, jewelry, sports equipment, and other hard goods that can be traced with a receipt when the time comes to assess insurance needs (or to file a claim). But what about the things you’ve curated over the years? What about the grandfather clock that you inherited? The comic book collection that you brought over from your parents’ basement? The football signed by Joe Montana? All of these things carry value that isn’t so clear cut, but could be worth a small fortune. Look around your home and make a list of items that need to be appraised by an expert, and have it done. Add the list of appraisals to your agenda when sitting down with a broker.
6. What Isn’t Covered?
What isn’t covered isn’t often as clear as what is. Theft from break-ins, accidental water overflow, fires and acts of vandalism are all known to be covered by most forms of comprehensive tenant insurance. But damage from floods, sewer backups, and earthquakes are often not covered by base level tenant insurance, yet can be added to your policy. Learn more about tenant insurance here. Grey areas are found when it comes to neglect and intentional acts. For example, how will your policy apply to the latter when your 3 year old throws a baseball at the window? Once again, only a conversation with a broker that understands all of the unique variables that can impact tenant insurance can answer these questions, and ensure that you have maximum coverage.