If you rent, remember you need insurance, too
Tenants are not covered under their landlords' policies
August 20, 2005
CREDIT: Glenn Baglo, Vancouver Sun
BCAA's residential insurance expert Patricia Stirling urges renters to get home insurance.
Lena Karlstrom is a fire victim with a difference. She had tenant's insurance which will go a long way to replacing her lost possessions.
Most of the renters burned out earlier this month when fire destroyed four Kitsilano heritage homes were not protected and are starting over from scratch.
Renters often mistakenly believe that the landlord's insurance covers their personal property but it does not, said Lindsay Olson, Vancouver-based vice-president of the Insurance Bureau of Canada.
Nor does it cover the tenant's personal liability if he or she is responsible for a fire or loss or injury to him- or herself or another person.
A standard tenant's policy also includes all sort of little-known coverages ranging from the cost of accidental damage you might cause while visiting someone else's home to medical claims by someone bonked on the head by your errant golf ball.
More important, if you are burned out, it will also pay for a motel and out-of-pocket expenses while you look for a new place.
Yet most renters don't give insurance much thought.
"We don't have hard numbers, but anecdotally we've heard that it may be less than 25 per cent of tenants who actually carry tenant's insurance," Olson said.
Karlstrom is a mother of two who recently separated from her husband and had just finished buying all the stuff she needed for her new place when the fire struck.
She was paying $30 a month for $30,000 of basic coverage from the B.C. Automobile Association and is still compiling an inventory of her losses which include designer jewelry from her native Sweden and most of about 900 books collected over 20 years.
"I lost everything in the fire," said Karlstrom, a 41-year-old teacher of Swedish and Scandinavian literature at the University of British Columbia. "I saved a few pieces of furniture, most of my photos, a few books and some clothes but the rest is gone or damaged by smoke or water."
Karlstrom said becoming a mother changed her outlook on insurance.
"Before then I was like most of the people in the building who didn't think they had much and didn't worry about it. I never imagined my losses would amount to $30,000 but when you start adding it all up, it's surprising."
BCAA's Patricia Stirling suggests everybody -- tenants and homeowners -- should take an inventory of their possessions.
"I guarantee that if you listed every single item that you own, you would have twice as much as you expect," said the auto club's manager of underwriting development.
"People tend to forget that the cost of food items like spices can really add up if you have to replace them all at once. Or they forget things that are only used occasionally, like rollerblades, or the box full of Christmas decorations on top of the closet."
The liability protection bundled into the standard tenant's policy is also important. The landlord may have fire insurance, but if you are responsible for burning the building down, you will be expected to pay.
Stirling notes liability coverage applies anywhere in the world, so you have some protection if you are taking a trip to Palm Springs and your golf ball hits someone in the eye, although there will be a limit to the amount that can be claimed.
Similarly, property coverage applies outside the home to include items stolen from your vehicle -- auto insurance only covers items affixed to the vehicle like audio systems -- or the loss of your suitcase on vacation.
Less well-known is something called "voluntary medical or property coverage" where your policy will pay out if a visitor to your home is injured, perhaps cutting themselves on a glass coffee table and requiring stitches, or if you clumsily break somebody else's glass coffee table while visiting their home.
All tenant's policies have exclusions, including wear and tear, flood damage, or losses resulting from your own illegal activity. If your grow-op goes wrong, you are on your own.
There are also limits on how much the standard policy will pay for CD or book collections or items like bicycles, jewelry, furs, artwork and computers. If you have more of those items than the average Joe, or more expensive versions, you will need to pay for extra coverage.
You can also pay for extras like earthquake insurance and some insurers, including BCAA, offer identity theft protection, in case somebody racks up bills in your name and ruins your credit rating.
For more information on tenant's or homeowner insurance call the Pacific region office of the Insurance Bureau of Canada toll-free at 1-877-772-3777 or visit www.ibc.ca
© The Vancouver Sun 2005