Tenant and Condominium Insurance FAQ
Why do I need Tenant Insurance?
To Protect Yourself
Do you know that your landlord has no legal responsibility to replace or pay for your personal possessions? If your possessions were damaged or destroyed in a fire or natural disaster, or stolen, replacing them could be costly. Even if you don’t own your home, you still need insurance to protect your possessions and to help meet your obligations to others, including your obligations to the owner of the home you’re renting.
If you’re in your first apartment, you may think you haven’t accumulated anything of real value yet. Not true. A small amount of furniture may not seem worth much, but when you have to replace it, it could be expensive. If you’ve bought a CD player or furniture on credit and it’s destroyed by fire or stolen, you’re still responsible for paying the balance to your creditor, even though you now don’t have the item.
To Fulfill Responsibility to Others
Do you know that you could have a legal responsibility to replace an entire apartment building even though you may be renting only a small part of it? Your stove, for example, could catch fire, leading to damage by smoke, fire and water to the whole building. Or suppose a visitor were to be injured in your apartment and sued you; you’d be responsible for paying any legally awarded settlement. Without liability insurance, you could end up paying for a long, long time!
To Cover Improvements
If you are a tenant, you can choose from a variety of insurance policies that remove much of the worry from renting.
Tenant’s Improvements coverage is an important consideration because policies generally have standard limits that are sometimes not high enough to cover all of the improvements that you may have made to your rented home. Such improvements could include broadloom, built-in cabinets or sound systems. You may need additional coverage.
Why do I need Condominium Insurance?
Condominium dwellers experience some of the best aspects of home ownership and renting. As a condominium owner, you have title to your own "unit" as well as a share in common areas such as lobbies, for example, or perhaps a swimming pool, parking garage, or garden. The nice part about condominium living is that you are a shareholder in the corporation from which you "rent" access to the common areas. The no-so-nice part is that you and your fellow owners can be held personally liable if things go wrong. A condominium insurance policy is a low-cost way to worry-free condominium ownership.
Loss assessment coverage is an important feature of condominium insurance because you share responsibility with others for common property. The insurer will pay (up to a stipulated limit) your portion of any special assessment that is valid under your condominium corporation’s governing rules providing:
- it is due to a direct loss
- that affects a shared part of the premises (such as the lobby, example, or an elevator)
- that has been caused by an insured peril
- it is due to legal liability arising out of shared ownership of common areas of the condominium premises (for example: to compensate a visitor for injuries caused by tripping over a frayed carpet in a corridor)
- The assessment was not necessary because of a deductible in the corporation’s own insurance policy.
Normally, the condominium corporation’s own insurance coverage will be adequate; insurance-related special loss assessments are not very common.
Condominium owner’s improvements or tenant’s improvements coverage is an important consideration, as most policies have standard limits which may not be high enough to cover upgraded broadloom, for example, or built-in cabinets or sound systems. You may wish to consider buying extra coverage.
If you own a condominium unit, you can choose from a range of insurance policies. You’ll want to insure the contents of your home, and you may wish to insure your condominium (excluding improvements) separately from the condominium corporation so that you would be protected, should the corporation itself not be adequately insured.
Why do I need to insure my cottage (or other seasonal dwellings)?
If you have a cottage, you may wish to have it insured as part of the same policy as your condominium or tenant insurance. Coverage is usually more limited than with dwellings that are occupied year-round and are close to water mains, police and firefighting services. Burglary can be purchased, but not theft. For a claim to be considered there must be signs of forcible entry. Vandalism and malicious acts are not covered either, but can often be purchased separately.. In winter, make sure that snow does not accumulate on the roof; a collapse due to the weight of snow would not be covered. With cottage insurance, it’s important you understand the policy’s limits before you agree to coverage. Remember to include outbuildings, fences and so on when calculating the coverage you need.