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Should I Have Insurance if I Live in an Apartment?

By HUB SmartCoverage Team on May 11th, 2017

If you live in an apartment you do not need homeowners insurance. This is because the building will be covered under the property owner’s policy. However, their policy does not cover you completely; it is the physical structure of the unit that is covered, not your belongings.


So while you do not need home insurance for an apartment,you should consider renters insurance. Here’s three reasons why.


Recover Damages to Your Personal Property

This is one of the most common reasons you need insurance if you live in an apartment. You may not own the physical building, but you do own everything in your apartment, from clothing to furniture to electronics.


Could you imagine how much it would cost to replace all of your personal property if you had a fire, a theft or water damage inside the apartment? The replacement costs can quickly add up and buying renters insurance can help ease the financial burden.


There are two types of personal property insurance available for tenants: the first is actual cash value and the second is replacement cost. Actual cash value is a payment from the insurer to the tenant based on the current value of the damaged or lost items, and it takes the depreciated value into consideration.


A much better option is to be compensated for the full cost of replacing the lost or damaged items. This option usually comes with higher premiums, though, because the risk is greater for the insurance company. When the amount of risk increases, so does the cost of renters insurance.


Protect Other Tenants

Did you know that you can be held personally liable if your actions cause harm or damage to other tenants in your building? Landlords have property insurance to cover the structure of the building, the surrounding property and the common areas; but if damage is caused (directly or indirectly) by someone’s individual actions, that person is responsible for the repairs and replacement costs.


As an example, if a flood or storm causes damage to the building (i.e. the roof) the landlord’s insurance will cover the repair costs. However, if you cause a fire (i.e. from a stove or toaster oven) that affects your apartment and other apartments in the building, you as an individual are liable.


Limit Liability From Visitors

According to theInsurance Bureau of Canada, tenants are often required by their landlords to have both contents and liability insurance, two subcategories of renters insurance. “If someone slips and falls in your rental, you may be held financially responsible for the cost of the injured person’s damages. As a tenant, you may be liable for unintentional harm caused to others who live in or visit the property.”


Landlords can make proof of insurance a condition of the lease, and if renters don’t have coverage the landlord can refuse to rent the apartment. So while renters insurance is always a safety net, it is sometimes a requirement to rent.


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