Just because your landlord has coverage doesn’t mean that you do, too. In most cases, your landlord’s insurance policy will only cover structural damage to the building itself. If your apartment were to go up in flames, your landlord’s policy would not reimburse you for your lost possessions.
Renters insurance protects your possessions in case of a covered loss from fire, smoke, lightning, vandalism and theft. It also extends beyond theft or other hazards that occur in your unit, covering property that is stolen from your car, or is lost or damaged anywhere you happen to be.
There are two personal property coverage options to choose from: replacement cost value or actual cash value. Here’s an example to illustrate the difference:
The furniture you bought a few years ago for $650 might only be worth $100 today, but it would cost $900 to replace. With an actual cash value policy, you would get reimbursed the current depreciated value of the item. However, if you have replacement cost for your personal property, you would collect the full cost to replace the furniture. Replacement cost value ensures that you can replace yesterday’s purchases at today’s prices.
Calculating the value of your belongings can be difficult, but these two tips will help you.
In addition to protecting your personal property, renters insurance also protects you in the event that you are responsible for injury or property damage to others. That means you’ll likely be protected if someone slips and sprains his or her ankle at your annual birthday bash.
Liability also provides coverage up to your policy limits for your legal defence costs and judgments in a lawsuit, whether an incident occurred within your rented residence or elsewhere.
Make sure to set aside some time each year to review your policy and ensure that the limits and coverage you have selected are right for you. Evaluate your needs based on your provincial regulations, the value of your belongings, the money you have in savings and the amount of risk you feel comfortable taking. Then, make sure to read the entire policy—especially the exclusions—to guarantee that you are covered in every situation that is necessary for your lifestyle.