Why do I need Tenant’s Insurance?

Todd Ellis |

So your landlord has checked your references, received your damage deposit, and given a move-in date - you can finally breathe a sigh of relief as you move into your new place! After weeks of setting up new accounts, finding furniture, packing and unpacking, there is one last question that remains… do you want to purchase tenant’s insurance?

Surprisingly, over half of Canadians renting property do not have insurance. That is in stark contrast to 97% of homeowners who insure their home, according to a Statistics Canada report 1. So why do tenant’s not cover their bases?

Some may think that their landlord’s insurance will cover their property as well. Others simply do not see the point in the extra cost, “believing the likelihood that something bad will happen is slim” 2. Many are first time renters who are not even aware of how invaluable insurance is. These explanations do not suffice - tenant’s insurance is an affordable and crucial coverage that may maintain your livelihood amidst a disaster.

Personal Belongings

This is the most common reason that renters need insurance. In one case, an apartment in Ottawa burned to the ground causing $1 million of damage. Thankfully the homeowner’s insurance covered their costs, however the same cannot be said for “most of the tenants in the building [that] lived without renter’s insurance” 3. Landlords may have home insurance on a property in case of a disaster such as this, however this does not extend to their tenant’s belongings.

Possessing insurance will also cover any belongings that were lost due to theft. There are countless stories of individuals that regret refusing to make a $20-$30 monthly payment after losing in excess of several thousand dollars of possessions due to a break-in.

Living Expenses

So the worst case scenario happens and your apartment is destroyed. Where are you going to stay and how much is this going to cost? Tenant insurance is again useful as it “helps cover expenses like moving costs, a hotel room and more if you can’t live in your rental” 4. Without insurance the added costs of eating out and living in a hotel rubs salt into the wound of not having a home to live in.


Personal liability can be the most costly obstacle a renter may have to face without tenant’s insurance. If a visitor suffers severe bodily damage in your home without coverage, there is a high possibility that you will endure the hefty costs of legal fees in court. Insurance will often cover up to $100,000 of liability claims and lawsuits. Furthermore, insurance will prevent you from being liable if visitors damage their property while at your home.



1. http://www.cbc.ca/news/canada/ottawa/most-renters-skip-home-insurance-1.911039

2. https://www.thestar.com/life/homes/2011/08/16/do_renters_need_insurance.html

3. https://www.lowestrates.ca/news/stats-canada-encourages-renters-acquire-insurance-case-fire-468

4. https://www.rbcinsurance.com/home-insurance/tenant-insurance.html


*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.