Why some tenant insurance policies include legal protection for tenant rights

This guide is part of our series on tenant liability insurance and personal liability cover. 

Renting offers a flexibility that isn’t always afforded to homeowners. It allows you to relocate quickly if you change jobs or need to make lifestyle adjustments, reduces the amount of home maintenance you’ll need to do, and often makes budgeting and financial management slightly easier. 

However, one area which can sometimes go overlooked as a renter is a tenant insurance policy. While homeowners are often required by lenders to have some form of insurance, landlords don’t always require it of their tenants. And while that might feel like money back in your pocket every month, the reality could be a little different. 

Tenant insurance often comes with legal protection that renters aren’t even always aware they need. This can support them across a number of areas, such as for damages in the home, or if someone’s injured on the property they’re renting. 

The main reasons to include legal protection in a tenant insurance policy 

At its core, a policy which provides you with legal protection exists to make things easier and more efficient for you. Often referred to as personal liability coverage, or even tenant liability insurance, this kind of cover exists to help you cover costs associated with potential legal expenses, as well as helping to pay to replace items or repair parts of the building which have been damaged during your tenancy. 

Accidents happen when you rent. A good insurance provider understands that, and builds in this basic legal protection to make sure you have something of a financial safety net to fall back on. You’re unlikely to be fully covered in the case of extreme damages, but you will at least see some of your expenses covered.

As our recent guide to tenant liability insurance highlighted, the average liability claim for property damages in Canada reached as high as $15,419.48 across the past four years. That gives some indication of importance of this kind of protection. 

What legal protection normally covers in tenant insurance 

Just as with any insurance contract, no two policies are the same. That said, there are a number of core areas which most liability clauses will support with: 

• Coverage for accidental damage to the rental unit. So long as damage occurred by accident, coverage will usually help to pay for repairs. That extends to things like putting a hole in a dry wall, causing damage via smoke or fire, or some kind of water damage (although this will vary depending on the type of enhanced water coverage you have). 

• Help with lawsuits. While you can’t prevent being sued for damages, personal liability cover helps to pay some or all of the expenses of the case. That means legal fees, such as hiring a lawyer, alongside any settlement amounts that need to be paid. 

• Pet and guest liability. It might not just be yourself who triggers the need for legal liability cover. A pet, or even just a visitor, could also cause damages or injuries to happen. A policy should also factor this possible scenario into an agreement. 

• Mandatory requirement in leases. Sometimes landlords will require you to have tenant insurance to be able to sign a lease agreement. It’s not uncommon for them to also want personal liability cover to be included as part of this. This kind of cover doesn’t just protect you – it also makes it far more likely that they’ll see any damages to their property paid in full. 

What kinds of scenarios might need legal protection? 

Many different scenarios can trigger the need for personal liability coverage. 

• Accidental damage to the rental property. The most common claim made for liability coverage is to cover expenses relating to damaged property. Even the most diligent tenant can’t control everything that happens in their home. Having a financial safeguard could make all the difference in the event of an accident. 

• Visitor injuries. If a visitor (such as a tradesman or mailman) gets hurt while visiting your rental property, they might sue. Legal protection will help to cover court costs, while also serving to pay them indemnity if they win their case. 

• Pet-related incidents. We all love our pets – but as any owner will tell you, they don’t always follow the rules. Whether it’s something like a dog biting a guest, or a cat spraying and damaging drywall, incidents involving animals are also covered. 

• Off-premises liability. Some insurance coverage will even cover you if you’re not at the premises you live at. This isn’t always a given, but it can provide financial protection if accidental damages to property or third-parties happens away from the home. 

Why don’t all tenant insurance policies offer liability cover?

The reality is that most tenant insurance policies do include personal liability coverage and other legal protections as part of their policy. But, in those cases where they don’t, there might be a number of factors which influence this decision: 

• Named perils policies. Sometimes tenants are only offered a “named perils” form of liability cover, which only covers specific risks. This is often cheaper, but provides far less financial security in the event of a claim. 

• Contents-only. Insurers might only provide protection in the form of contents insurance to tenants. This means that their personal property (as in, their possessions) are covered, but not the possessions or the property of the landlord or any third-parties who visit their home. 

• High-risk exclusions. If there are specific situations which pose a slightly higher risk than others (such as certain breeds of dogs, who are more aggressive on average), some insurers may not offer full personal liability coverage. 

Despite some providers not including it as part of their coverage, having legal protection in the form of personal liability coverage is hugely important for renters in Canada. At APOLLO, we provide tenant insurance with liability cover up to as much as $2,000,000. Make sure to get a quote to see how you could be supported by this vital aspect of tenant insurance.