Know Your Insurance: Understanding Renters Insurance


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.

Property Protection
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.

Coverage options
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.

  • Create extensive records of your possessions. It is recommended that you take close-up and wide-shot pictures of individual belongings. Then make an item-by-item list so that if necessary, you can quickly skim it to see what items are documented in the photos. Some people find it easier to keep their lists of belongings grouped according to the rooms they are located in. Others group their belongings by item type, such as jewellery, artwork, books, furniture, etc. However you decide to record your possessions, it’s a good idea to store the information in at least two different places. Consider keeping a hard copy of all of your lists and photos in your office at work and also saving them to a folder on your computer.
  • Do your research. Even though your kitchen table may have cost you $500 when you first bought it, a comparable new one could cost you double that amount, so that’s the amount you want to be covered for. Check out websites and local furniture stores to see what comparable prices are.

    Liability coverage
    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. If you have questions about your renters insurance policy, contact D.I.S. Financial Group today!

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