The last thing anyone renting their housing in Metro Vancouver wants to do is add another expense to their monthly budgets. But experts caution that there's at least one extra cost they shouldn't skip: Renter's insurance.
For over a year, Canada's top five rental markets have been located in Metro Vancouver. This October, it costs an average of $2,406 to rent a newly-listed one-bedroom, unfurnished unit in the region, according to liv.rent's monthly report.
Want to rent an apartment in Vancouver proper? Try shelling out an eye-watering average of $2,831 on your monthly stay.
Why you should have insurance if you rent in Vancouver
Renter's insurance may feel like an afterthought, but it could mean the difference between forking out massive funds to cover damages you may have caused or buying new belongings after yours are destroyed.
Metro Vancouver Lawyer Michael Golden specializes in tenancy/landlord disputes and says it is crucial that renters buy insurance when they move into a new spot. Not doing so could mean trouble down the line, regardless of whether it was included as a clause in their lease.
Many landlords do require their tenants to purchase a rental insurance package but the exact terms will vary based on circumstances. For example, some contracts include a "standard form" that requires tenants to renew a policy on an annual basis. In this case, it is incumbent on the landlord to "check in" with the renter to ensure that they have maintained their end of the bargain.
"A lot of people don't do that every year. So, if the tenant stays for four or five years and the landlord never contacts the tenant to confirm annually if they renewed their insurance, I don't think the landlord could succeed in terminating the tenancy for breaching a material term," Golden told V.I.A.
In other contracts, landlords will simply require tenants to "keep and maintain" insurance without the stipulation that they notify the landlord annually. As such, landlords should consider what may be pros and cons of specific verbiage in their clauses.
But even if tenants don't face a potential ousting for not purchasing insurance, they put themselves at risk of financial ruin if they don't purchase insurance.
How insurance policies vary from company to company
If there is a major flood or destructive fire, a landlord's insurance will not cover their tenant's belongings or their new accommodation. In other words, the cost of clothing, furniture, appliances, and other items will not be reimbursed by the landlord or the government. Tenants may also be on the hook for hotels or other accommodation if they are temporarily displaced.
According to the Tenant Resource & Advisory Centre, some rental insurance policies will pay for hotels or other living arrangements if a natural disaster forces you out of your living situation. Similarly, you may get a dollar amount to spend on the cost of replacing your belongings, including everything from your basic necessities to entertainment items.
Policies "vary from company to company," TRAC cautions, adding that some of them may immediately replace stolen belongings with new ones while others "may not cover burglary at all if you live with multiple unrelated roommates." The cost of purchasing renter's insurance may also vary based on your credit score and if you've had prior insurance. As with purchasing any insurance policy, experts encourage renters to do some research and shop around.
With this in mind, Golden says rental insurance is a vital component of renting. There are some cases where a landlord may be on the hook for covering damages to your property, but tenants shouldn't count on this possibility.
"The landlord may be responsible for the tenant's property if they contributed to what happened, such as if you live in a house and told them about a leak and they never fixed it," he described.
Vancouver Lawyer Kyla Lee notes that renter's insurance can also "cover liability if you do anything negligent to destroy the property," such as if you forgot to turn off the stove or left your water running.
"That would protect you from being sued in such circumstances. So getting tenants insurance with a provision to cover liability for damage to the structure is a good idea, even if it is more expensive," she told V.I.A.
