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Is Tenant Insurance Mandatory in Ontario?

When renting a property in Ontario, you may come across something called tenant insurance. Given that some landlords require that tenants have this insurance, you may be wondering whether it is mandatory or not.

Thankfully we’re here to answer all the questions you may have about tenant insurance. We’ll examine what tenant insurance is, its benefits, how much it costs, and whether the laws require it in Ontario. Let’s take a look!

Ontario Regulations and Tenant Insurance

The Ontario Residential Tenancies Act (RTA), which is the law governing the relationship between landlords and tenants in Ontario, does not require tenants to have tenant insurance. So, tenant insurance is not compulsory in Ontario.

However, it’s important to know that in the event of incidents, landlords are only responsible for structural damage to the rental property. They are usually not responsible for any damage or loss to a tenant’s personal belongings.

Thus, to ensure that their properties are protected should something happen, tenants may choose to buy tenant’s insurance.

What Is Tenant Insurance?

Tenant insurance, also known as renter’s insurance, is a type of insurance bought by a tenant that protects their belongings within a rented apartment in the event of some unfortunate event. It also covers personal liability and additional living expenses. In Ontario, standard tenant insurance policies cover:

Personal Belongings – It covers the cost of repairing or replacing your belongings, such as furniture, electronics, clothing, etc. For example, you left a stove unattended, and a fire breaks out and destroys your belongings, you will be covered.

Personal Liability – It covers your legal fees and payment for damages if you are sued for causing damage to the rental unit or causing injury to someone else who visits the property. An example would be if you spill water on the floor, and a visitor slips and falls, and then sues you for their medical bills.

Additional Living Expenses – It covers your expenses if you are forced from the rental property. This includes the cost of temporary accommodation (such as hotel stays), meals, and transportation.

Exactly what’s included in your policy will depend on the type of coverage you have. It’s important to look into the details of your policy to ensure that you have the financial protection you need.

Cost of Tenant Insurance

The cost of tenant insurance in Ontario usually ranges from $15 to $40 per month or $180 to $480 per year, with the average being around $350. Factors determining the cost of tenant’s insurance include:

Your Desired Coverage Amount – The more it takes to replace your personal belongings, the more your monthly insurance payment.

The Location of the Property – If the rental unit is in a high-risk location (close to rivers, high crime areas, etc.), you can expect a higher premium.

Your Claims History – If you are a high-risk renter who’s had a lot of claims in the past, you can expect a higher premium.

The Insurance Company You Use – Different insurance companies offer different rates and therefore it’s important to shop around or find a great insurance broker that will do the hard work for you.

If you’re worried about the cost of tenant insurance, there are a few things you can do to lower your premiums. However, this is generally one of the more affordable insurance types and can be an important way to give yourself financial protection.

cost of tenant insurance

Do You Need Tenant Insurance?

As we mentioned, tenant insurance is not compulsory in Ontario. However, having tenant insurance may be necessary for the following reasons:

Covers Damage to Your Personal Belongings

The foremost benefit of tenant/renter’s insurance is the protection of personal belongings. With renter’s insurance, you won’t have to worry about losing your personal belongings to a fire, flood, vandalism, theft, etc.

If you cannot afford to repair or replace your property out of pocket if an accident happens, you need renter’s insurance.

Liability Coverage

Another benefit of tenant insurance is protection from certain lawsuits. This could be the landlord suing you for damage to the rental unit or a visitor suing you for causing injury to them while on the property.

Covers Additional Living Expenses

Remember that tenant insurance also covers additional living expenses. So, if you do not want to pay out of pocket when forced out of your living quarters temporarily because of mandatory evacuation or repairs, tenant insurance can be there to help.

Makes Finding Rental Accommodation Easier

While tenant insurance is not compulsory in Ontario, many landlords require it because the liability coverage it provides helps mitigate financial risks.

Many times, visitors who get injured on a property hold the landlords responsible for the tenants’ actions. The reasoning is that landlords typically have more substantial financial resources than individual tenants, so suing them increases the chances of recovering damages.

But this can be prevented when the tenant has renter’s insurance. The aggrieved visitor can sue the tenant, knowing they can receive compensation from the tenant’s insurance.

Also, when landlords have to sue tenants for damaging the property, they can be sure there’ll be no bitter dispute over responsibility as the tenant’s insurance will be the primary source of compensation.

Given how tenant insurance mitigates financial risks for landlords, many landlords refuse to rent their property to tenants without it. This can make finding suitable accommodation more difficult. So, if you want your accommodation search to be easier, you may need tenant insurance.

need tenant insurance

Final Thoughts

Tenant insurance is not mandatory for tenants in Ontario. However, there are many great reasons to get a policy as it helps protect your personal belongings, covers certain personal liability, covers additional living expenses, and can make finding suitable rental accommodation easier.

If you’re in need of tenant insurance or have any further questions, then contact Ron Johnston Insurance today. We’ll be more than happy to help and will ensure you get the perfect policy for your needs.

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