17 January 2019

How and why to insure your home

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Are you a new or established renter who’s just realized you don’t know a thing about home insurance? You’re not alone. It’s easy to get lost in the technicalities, and we know they aren’t the juiciest way to spend your time. And yet! As a renter you need to insure your home and make sure you have the right coverage.

This post will explain why it’s so important and how to go about it.

THE WHY

Nearly 40% of Québec renters do not have home insurance. Such a high percentage should concern everyone, when you consider the risks that renters without insurance expose themselves to.

Home insurance for renters vs. owners

Some people mistakenly believe that their landlord’s insurance will cover them in the event of a mishap. So they think they don’t need to take out their own home insurance. But they’re wrong! Renter’s home insurance is a completely separate policy from the homeowner’s policy. It’s very important not to confuse them, since these two types of insurance policy are designed for different situations.

Your landlord has insured their own property. Their insurance protects them in the event of damage to the building and their personal property, for example the flooring, the walls, and the cabinets. They also have third party liability coverage. Their coverage is appropriate for their situation. You need to have your own!

The risks of not insuring your home

Keep in mind that in the event of a loss, the value of your property is not covered by your landlord’s insurance policy. What’s more, if you’re the one who causes the damage, you could be sued not only by the other tenants but also by the landlord and the insurers who have to pay for their claims. You definitely don’t want that to happen!

THE HOW

So even though there’s no legal requirement, it’s in your interest to take out your own home insurance policy to prevent any headaches and painful financial consequences. But how do you know how to insure your home properly? You need to choose the coverage that meets your needs and the value of your belongings.

2-in-1 coverage

Home insurance for renters covers your own property as well as any damage you may cause to someone else’s (“third party liability” or “civil liability”). For example, if a fire engulfed the building, including your apartment, you would be covered for the damage to your property. If your bathtub leaked and caused damage to your neighbour’s, you would be covered thanks to your third party liability.

These are the two main components: your property and any damage you may unintentionally cause to other people or property. Note that your home insurance will also cover third party liability for your spouse and children. If you share your home with roommates or a boyfriend/girlfriend (less than 3 years of cohabitation), the name of every occupant must appear on the home insurance policy.

What your policy can cover

Basic coverage includes third party liability and damage caused to your property by:

  • Nature: wind, hail, lightning, forest fires, explosions
  • People: theft, vandalism, riots
  • Malfunction: leaking pipes and plumbing (don’t assume your contract covers all types of leaks and spills. Additional coverage and endorsements are available)

Depending on your needs and your property, you can choose a comprehensive or specified perils policy. You can also choose additional coverage on an à la carte basis. Contact a damage insurance representative for more details.

Make an inventory of your property

Close your eyes and try to make a list of everything in your living room. Not easy, eh? You surely forgot a few items! Could you really estimate the value of everything you own?

When you take the time to inventory your belongings, you can choose an insurance amount that matches the value of each item. In the event of a loss, you won’t have any nasty surprises and the claims process will be so much easier!

Here’s how to make an inventory: First, list all your property, room by room. Ideally, take a picture or video of each item as well. Keep your inventory somewhere safe, for example a safe-deposit box.

Now you know why and how to insure your home as a renter! Did you know that you can also save money when you do? Start by shopping around, of course, but also consider combining policies with one insurer. At Promutuel Insurance, we offer discounts to people who insure their cars and their homes with us. Ask about a combined quote!