This is the time of year when many young persons are heading out on their own for the first time---off to college, off to university, or perhaps even just away from home. First apartments are being rented and leases being signed with roommates, co-tenants, guarantors. It is an exciting time!
What is often over-looked in the moving away from home process is the issue of insurance. While there may be some continued coverage for property and personal liability under a parent's home insurance policy there tend to be some gaps in coverage that leave the first time tenant inadequately covered in the event of a problem in the new apartment.
Renter's insurance is relatively cheap! You can find policies for as low as $150 plus taxes per year. It makes sense to be insured given what the insurance will cover.
A typical tenant's insurance policy will cover you for theft, water damage, fire damage, personal liability anywhere in the world. Typical policies will provide you with alternate accommodation (payment for it) for a period of time in the event that a fire, flood, or some other disaster makes your premises uninhabitable. For instance, if the upstairs neighbour forgets to turn off the tub, passes out in a chair, and three hours later you come home to find all of your ceilings collapsed and three inches of water in your apartment--you will be fairly pleased with yourself when you remember that you did indeed buy tenants/renters insurance and your insurance company is now paying for your hotel!
The benefits of renter's insurance can also be a pleasant surprise in instances where you just make a silly mistake, or your roommate makes a silly mistake, and causes a fair amount of damage that your landlord sues you for. Perhaps you're wondering what that could be? As an example, and I get these kinds of cases every year, winter arrives in Ottawa and the outside temperature drops. Before the cold snap hits, and without thinking about it, you open the window in the kitchen a crack (couple of inches) to let the cooking odours out. When you do it, the temperature outside is nice so you don't realize or remember that the window is open.
You then decide to go home for the weekend, and just as you're leaving you decide to turn the thermostat down a few degrees to save some money (and save the planet!). Unfortunately, what you don't know or realize is that the following evening the temperature is going to drop well below zero for the first serious freeze of the season. The freezing temperatures, along with the turned down thermostat and the open window in the kitchen cause a pipe just below the open window to freeze and burst. As a result, water pours into your unit and the unit below causing thousands of dollars in flood damage.
Burst water pipes (in a heater or waterline) are a very common occurrence in Ottawa. The damage caused by burst pipes often runs into the tens of thousands of dollars as water floods all the surfaces as it tries to get to the lowest point in the building. In this example, it would be entirely plausible for a landlord to try to 1) evict you and 2) sue you for the cost of repairs, lost rents, and associated expenses. Even if your landlord does not sue you, it is entirely possible that the landlord's insurance company would sue you for negligently leaving the window open and causing the pipe to burst.
The pleasant surprise in having renter's insurance is that you are likely covered for any claim made against you for accidentally leaving the window open. Your insurance company would pay for the repairs, the lost rents, the incidental expenses as well as a lawyer/lawfirm to defend you in any lawsuit. The relatively low premium of a couple of hundred dollars can protect you from many thousands of dollars in expenses.
I often hear tenants say that they didn't get insurance because they didn't think they would need it. Of course no tenant plans to be negligent (i.e. leave the window open), but there are so many silly things that any person can do that they don't realize will lead to a lawsuit. If you are still not convinced, consider that insurance will also pay to defend you from frivolous claims where you haven't actually done anything wrong.
Having a Landlord and Tenant law practice I see so very many problems that could have been resolved if the tenant only had insurance. I can assure you that most landlords will have a very different attitude towards you if you can say to them, in the face of a disaster, I'm very sorry for what happened but I am insured.
Before rushing out to buy a renter's insurance policy/ tenant's insurance policy, consider calling your parents' insurer or broker and checking to see what kind of coverage you already have. The broker or insurer may be able to sell you a separate policy that takes into account your family's relationship with the insurer or they may be able to sell you a rider, through your parents' policy that provides the protection you need.
I can't urge you enough to get insurance coverage as a tenant. It is a small expense for an incredible benefit should a situation arise where you suffer a loss or you cause a loss for someone else.
Michael K. E. Thiele
Landlord and Tenant Lawyer
Monday, 26 August 2013
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