Renters insurance Alberta

Whether you're thinking about moving out on your own for the first time, or have been a renter for quite a while, there always seems to be a conversation around tenant insurance.

So, what exactly is tenant insurance? Do I need renters insurance in Canada? Is tenant insurance mandatory?

If these are some of the questions swirling around your mind, you've come to the right place--we've answered all these questions and more down below, so you can get some clarity on tenant insurance and whether purchasing your own personalized tenant insurance is worth the investment. Stick around and see for yourself!

What is tenant insurance coverage?

Tenant insurance is a form of home insurance specifically designed to protect renters from the unique risks that arise when living in a rental property. In all standard Alberta tenant insurance plans, you can anticipate seeing the following policies:

Contents insurance coverage

Think about all of the personal belongings you own. Now imagine a scenario where something happened in your rental home that caused significant damage to your items. Without insurance, you could be looking at hundreds to thousands of dollars in repair and replacement costs.

This is where contents insurance comes into play. The contents portion of your tenant insurance policy will reimburse you for any repair or replacement cost that arises if your personal belongings are damaged or stolen due to theft, vandalism, fire, or other unexpected events listed in your policy.

Ultimately, this portion of your coverage is meant to provide you peace of mind knowing your personal items are protected, as well as your finances.

Tenant liability insurance

Did you know that you could be found legally responsible for bodily injury or property damage that occurs on your rental property? Whether it be a slip and fall accident or damage caused to a third-parties personal property, in the event a claim is filed against you, you could have to pay out of pocket for any costs that arise from this lawsuit.

But, with personal liability coverage, your insurance company will provide you with financial protection by covering the cost of medical bills, any repair or replacement cost, legal fees, settlement costs, and other expenses that may incur. Ultimately, liability insurance for renters is crucial to protecting your interests and finances in the event something unexpected happens on your rental property.

Additional living expenses

Let's say a cooking fire rips through your rental property, destroying your interior and making your home unlivable. As a restoration company works on repairing your property and ensuring that it's safe to live in, the additional living expenses portion of your renters insurance policy will pay for your accommodations, meals, and other related expenses, ensuring that you aren't stuck with a hefty bill during an already stressful time.

Optional renters insurance policies

Beyond standard tenant insurance coverage, there are additional coverage options you may want to consider. Just know that these optional coverages will be an additional expense and you should consider if an optional tenant insurance policy fits into your plans for spending and saving as you're crafting your first budget.

Identity theft insurance

Identity theft coverage kicks in in the event someone breaks into your home and steals your personal identification information with the intention of committing criminal acts. With identity theft insurance, you'll be reimbursed for expenses related to recovering your personal documents and replacing items such as your passport, driver's license, birth certificate, and more.

Sewer backup coverage

Sewer backup insurance coverage will protect you in the event there is a plumbing problem or other issue with the drain system in your home that has caused sewage to backup in your living space. This coverage is especially important for those living in areas with heavy rainfall, basement suits, or older buildings.

Overland flooding insurance

If you live near one of the many lakes or rivers throughout Alberta, you could be at risk of overland flooding. With overland flooding insurance, this coverage protects you in the event your personal belongings and home suffer water-damaged due to flooding in your area.

Is renters insurance mandatory?

If you're wondering, "is home insurance a legal requirement in Canada?" We're here to put your anxieties to rest. The short answer is no, it's not illegal to not have renters insurance. That being said, your landlord can require you for insurance purposes as a condition listed in your rental agreement. They can also issue a landlord rent increase once a year from the date you sign your original lease agreement.

How is a rental insurance premium calculated?

Like all the types of insurance out there, what you pay for tenant insurance may be different from what another individual ends up paying. So, how is homeowner’s insurance calculated? What does renters insurance cost for an apartment?

When getting renters insurance, it's important to shop around and get a tenant insurance quote from different providers in order to compare prices and coverage so you can find proper coverage for an affordable cost.

While all insurance companies are different in how they will conduct their risk profile on you as a renter, here a general idea at the factors that will play into your final premium:

Where your rental home is located

There are many Canadian cities where you can rent a home, and Alberta is one of them. So, you can expect an insurance company to take into consideration where you live when calculating what you'll pay for your insurance policy.

Renters living in metropolitan areas with high population counts and crime rates may pay more than those living in areas of Alberta that are more rural.

The value of your personal belongings

The total value of your personal belongings is also another factor providers will consider. High-value items cost more to repair or replace in the event you file an insurance claim, which a company will need to factor in to ensure you have adequate coverage.

Your insurance history

If you're a tenant with a previous rental history and former claims, you may end up paying more for insurance than a new tenant who has never rented a property from a landlord prior. The more claims you file, the more of a risk your provider will deem you, which translates into higher premiums more often than not.

Your deductible amount

Certain policies of your tenant insurance require you to pay a deductible out of pocket before the rest of your insurance kicks in to pay the rest, similar to how auto insurance works. Choosing lower deductible options may cause your tenant insurance premium to increase.

Whether you purchase additional coverage

Like we mentioned, choosing to add additional coverage to your tenant insurance will cost more than a basic renters insurance plan.

Your coverage limits

As a tenant, you'll be able to choose how much liability coverage you receive. Standard plans offer $100,000 in liability but can go up to $2 million. The more personal liability you buy, the more it will cost.

Credit score

Your credit score may also be considered, but this depends on which insurance company you work with. Renting with bad credit is possible. However, it looks better to your landlord and insurance company if you have a higher credit score as it shows them that you are financially responsible.

Get a free credit score check and learn how to build your credit with KOHO today!

Does tenant insurance cover bed bugs?

Another question you may have is, "does renters insurance cover bed bugs?" And the unfortunate answer to this question is no, standard tenant insurance will not cover you in the event you experience a bed bug infestation in the property that you rent.

Does tenant insurance coverage protect you against fire damage?

So, what about fire damage? Does renters insurance cover fire? Yes, you can have peace of mind knowing that tenant insurance coverage protects renters in the event their personal belongings and rental property are damaged due to an unintentional fire that occurs in their living space by covering the cost of repair or replacements and additional living expenses.

I live with roommates, do we all need an individual tenant insurance policy?

If you live with roommates it's natural to wonder, "does each tenant need renters insurance?" And the short answer to this question is yes. If you're sharing a property with someone, your existing policy only protects your items and your interests.

So, if someone suffers a bodily injury on your property while all your roommates are present, only those with personal liability coverage will be protected in the event a lawsuit is filed against you by a third party.

How to save on tenant insurance policies

If you want to save on monthly expenses and tenant insurance, here are some tips you can use to lower your coverage premiums:

Work with an insurance broker

Brokers don't work with a single insurance provider. Rather, they work independently, allowing you to shop around and get a personalized tenant insurance quote from different providers. This will allow you to compare coverage options and find the best deals available.

Bundle your tenant insurance with auto insurance

Bundling your tenant insurance with your existing car insurance is another great way to save on your premiums. Insurance companies typically offer savings to customers who have more than one policy with them as a show of thanks for remaining loyal to their business.

Ask about discounts

You'd be surprised to know that there are numerous tenant insurance discounts available for which you may qualify. Make sure to ask your agent or broker whether they are eligible for additional savings.

Pay your premium upfront

If your personal finances allow, consider paying your coverage upfront. Insurance companies tack on administration fees to customers who pay monthly as they need to process each payment, which costs the money. By paying upfront, you can waive these administration fees and save.

Increase your deductible and consider your coverage limit

Increasing your deductible can lower your premium, and choosing a lower coverage limit can do the same. Keep in mind, however, that this will determine how much you pay out of pocket in the event you file a tenant insurance claim and how much financial protection you'll receive.

Purchase affordable renters insurance coverage with KOHO

Finding the right protection when it comes to renters insurance can be daunting, but with the help of KOHO, you'll be able to breeze through the process and feel confident about the coverage you choose.

Whether you're considering whether you should get insurance early, unsure whether to rent vs. own home, or learn how much of your income should rent be, KOHO offers numerous online resources and financial products that can help you set up your financial future and achieve your financial goals. We can also walk you through speaking with an insurance claims team and give you more information that can help you answer your burning question, "how does a renters insurance claim work?"

For example, KOHO offers a high-interest savings account, where you can earn interest at low rates to finance your ongoing expenses like insurance and rent. We also offer overdraft protection coverage that offers you a $250 cash advance just for signing up. Life can throw the unexpected at you at any time, but with this coverage, you'll have an added sense of security when things get tough.