Half of Canadians don’t have tenant insurance – where do you stand?
You hear the same story time and time again – a fire burns down a house or an apartment building, leaving the tenants with just the clothes on their backs. Not only are the homes destroyed, but many people often don’t have tenant insurance to help cover their property and personal belongings.
You may think renting a property and renter’s insurance, also known as tenant insurance, go hand-in-hand. Sadly, this isn’t the case. According to a study conducted by Substance Strategies* for belairdirect, more than half of tenants (53%) in Canada don’t have tenant insurance. Almost a third of renters who don’t have tenant insurance have never even thought of getting it.
Myths vs. reality
The study also highlighted why people may skip on tenant insurance. Here are some of the tenant insurance myths Canadians mistakenly abide by:
- Myth – The landlord covers all damages and risks (16% of surveyors believe this)
- Fact – The landlord has insurance on the building and items the landlord owns, but you are responsible for your own property and contents of the apartment/unit you are renting.
- Myth – Tenant insurance is costly (40% of respondents say they don’t have the means to pay for tenant insurance)
- Fact – Based on current Ontario minimum premiums, tenant insurance can cost as low as $23 a month.
- Myth – My neighbourhood is safe and I don’t need tenant insurance (12% of surveyors believe this)
- Fact – While people may consider their neighbourhood harmless, there are other risks that may be covered with tenant insurance. This includes fire, thefts, vandalism, and water damage.
- Myth – My items aren’t worth covering (a quarter of respondents believe this)
- Fact – Quite often, people tend to undervalue the replacement cost of their possessions. For instance, shoppers looking for a bargain tend to buy things on sale. For example, an $800 TV purchased on sale for $400 will cost $800 to replace instead of the reduced amount. The calculation needs to be based on the full retail value – not the actual purchased cost.
- Myth – I never even thought about tenant insurance (30% of surveyors indicated this)
- Fact – According to the survey, many respondents have no understanding of civil liability. People may be aware of dangers like fire in general, but what if you accidentally caused a fire? If this is the case, then you’re financially responsible for the damage you caused. This is an example of a civil liability tenants should be aware of and consider when getting tenant insurance.
The need for more awareness
Of all provinces, our friends in Quebec are the most aware when it comes to realizing the need and importance of property insurance. Of the 47% of Canadians who have tenant insurance, the percentage is higher in Quebec than Ontario (67% vs 45%).
As a renter, take the time to review your choices, ask questions, and select the option that best suits your needs – personally and financially. Once you have tenant insurance underneath your belt, you can rest easy knowing your personal property is covered in many different ways!
Other survey results from the study include:
- Forty per cent of Canadians don’t have a clue about the cost of renter’s insurance.
- The study found that surveyors perceive the national average cost of renter’s insurance to be $600 a year. Ontarians perceive it to be higher than the national average (at $664/year).
- Thirty-three per cent of Canadians have already made an inventory of their property.
- Those between the ages of 45-54 years old are more likely to take a photo or video of their inventory (46%).
- Overall, Canadians’ average of their property value is estimated at $15,000.
- Young respondents, 18-24 years old, were more likely to have never thought of buying tenant insurance (41%).
*Substance Strategies conducted the study on behalf of belairdirect. The study was conducted during the period of January 15-25, 2015, with 4,084 Canadians partaking in the study.