If you’re looking to rent an apartment in Toronto or elsewhere in the GTA, you can usually get a tenants insurance package for $20-40 a month. And if you drive, which most of us do, your tenants or renters insurance could pay for itself by getting you a 5-15% multi-line discount on your auto insurance.
If you’re looking to get an apartment in Toronto or the GTA, you may already know that affordability can be a significant problem. Even with average rents coming down a little during the pandemic, you’ll be hard-pressed to find a one-bedroom for less than $1,500 a month anywhere near the city, and of course that’s only the beginning of the costs you’ll face. Happily, tenants insurance, sometimes called renters insurance, won’t be a huge slice of that cost pie (On average $33/mth). And if you play your cards right, it may not cost you much more at all.
The basics and the add-ons
A basic tenants package starts as low as $20,000 in contents coverage, $1 million in liability coverage, and additional living expense coverage, if you have to stay elsewhere while your unit is being repaired after a loss, with a $1,000 deductible. A basic tenants insurance policy doesn’t include coverage for earthquake, sewer backup or overland flooding;however, these can be added on to your policy for only a couple of dollars each per month.
| Coverage | Monthly cost |
|---|---|
| The Basics* | $12-25/mth |
| Add Earthquake Insurance | +$1-3/mth |
| Add Sewer Backup Insurance | +$2-3/mth |
| Add Overland Flooding Insurance | +$2-3/mth |
| Add Identity Theft Insurance | +$1-2/mth |
| Increase to $30,000 Contents Coverage | +$1 –2 /mth |
| Increase to $2 Million Liability | +$1/mth |
| Schedule high-value items | +1.5-2% of item’s value per year |
*Includes coverage for contents, liability, and additional living expenses.
Average tenants premiums in the GTA
Like we said, the cost of tenants insurance is still very affordable, but it does vary somewhat depending on how many belongings you own, how much crime there is in your area etc. The following chart shows the average tenants insurance premiums in Toronto and other municipalities in the GTA, based on rates from Mitch’s customer database. The good news if you live in Toronto is that unlike for lots of other things, Toronto is not the most expensive place to get tenants insurance.
| City/Region | Avg. annual premium | Avg. monthly premium |
|---|---|---|
| Ajax | $402 | $34 |
| Mississauga | $350 | $29 |
| Oshawa | $369 | $31 |
| Toronto | $407 | $34 |
| Whitby | $392 | $33 |
| Durham Region | $395 | $33 |
| Halton Region | $377 | $31 |
| Peel Region | $351 | $29 |
| York Region | $430 | $36 |
Source: Mitch customer database
(Note that the above average premiums are considerably higher than what’s reflected under “The Basics”, because most people have much more than $20,000 worth of belongings to insure, and most choose to add common sense coverages like overland flooding and sewer backup.)
Now here’s the kicker. If you pay about $2,000 a year for your auto insurance, it’s very possible you could save $200-300 by adding tenants insurance with the same insurance company. If your current insurer doesn’t offer that kind of discount, then you really need to call Mitch, because most of the insurers we work with do.
Do you really need tenants insurance?
Hey, you’re on an insurance broker website. Of course we’re going to say yes. But consider why:
- First off, your landlord will insist. Whether you’re renting from an individual or a corporation, your landlord has a master policy that covers the building itself, but they want to know that you have liability insurance in case you do damage to the property, or if someone gets hurt while visiting. You won’t get the keys without showing proof of insurance.
- You can’t afford to replace all your things. Even if you think you don’t own much, if there was a fire or a flood, and you had to replace all your clothes, furniture, appliances, electronics, dishes, toiletries and food all at once, it would likely cost you at least $20,000. Probably a lot more.
- If the apartment becomes unsafe, where will you go? If there’s damage to your building or the unit itself and you can’t live there, you still have to pay your rent, but you also have to find somewhere else to stay. Tenants insurance pays for this. Food too, within reason.
By law in Ontario, there is no requirement for renters to have tenants insurance. But landlords can and do insist, and it’s so affordable that it doesn’t make sense to go uninsured even if you could.
What else affects tenants premiums?
Let’s be clear. Your municipality isn’t what affects your premium. It’s not like everyone in Markham pays the same rate. It’s more specific than that. Based on your postal code, insurers have a pretty good idea about crime rates in your neighbourhood, how much damage is caused by fires, severe weather etc. The other thing your postal code reveals is how close you are to the closest fire hydrant and fire station. That can make a big difference in how much damage is done by a fire. Here’s a few other factors that will affect how much you pay for tenants insurance:
- Your insurance history – Gaps are bad
- Your claims history – Previous claims in 5 years could double your premium
- How much contents coverage you need
- How much liability coverage you need ($1 or 2 million)
- Your deductible – $500, $1,000 or more
- Your credit score
What is included in a tenants package?
A tenants package is affordable because it is very simple, and doesn’t cover the physical building, which is the most expensive thing to insure. Here’s what is covered:
- Your personal liability
- Your belongings
- Additional living expenses if your unit is damaged
- Voluntary medical payments
- Voluntary property Damage
Liability insurance, usually with a limit of $1 or $2 million, covers your legal bills and any court awards or out-of-court settlements if someone sues you. The most likely person or entity to do that is your landlord, because you are in their property every day. What if you forget the kettle on the stove and start a fire? What if you leave the water running in the tub and it floods your unit, and also the one underneath you? Liability coverage also protects you if you forget to clean up a spill and the cable guy slips and suffers a severe head injury. Sounds far-fetched, yes, but it absolutely happens, and that’s why your landlord will insist on this coverage.
Contents coverage protects your possessions from theft, fire, water damage etc. When you buy tenants insurance, your broker will probably ask you how much coverage you think you need, but the rule of thumb is about $7,000 per room. That includes bedrooms, kitchen, family/living room, bathrooms, dining room if applicable, and any in-unit storage rooms if applicable. Even for a one-bedroom, you’ll usually have a bedroom, a family room, a kitchen and two bathrooms, so you’ll need at least $35,000-$40,000 in coverage. Remember, coverage is on a “replace with new” basis.
Additional living expense coverage is not something most people think about, but because insurance companies work every day with families that have been through a fire or flood, they know that those families often can’t stay in the home while it’s being repaired. If you have to stay in a hotel for even a week and eat in restaurants while you’re out of your apartment, the costs add up quick. Additional living expense insurance will pay the costs for you to live as you usually would, so it won’t pay for steak dinners and a downtown 5-star, but it will keep you safe and comfortable.
Other coverages you should consider
When you’re talking to your insurance broker, make sure to ask about the following coverages. They may not add that much to your premium, and could be well worth it in the end.
- Coverage for sewer backup and overland water – We strongly recommend these coverages to all our customers
- Scheduling high-value items like jewelry, musical instruments, fine art and other collectibles – Depending on the sub-limits in your policy, if you have high-value items worth more than a few thousand dollars, we recommend at least getting quotes for scheduling these items in your policy
- Coverage for earthquake – Most of Ontario, including the GTA, is not at high risk for earthquakes, but earthquake coverage is affordable for that reason
- Identity Theft protection – This is still not a huge risk for most people, but identity theft is certainly becoming more common
All of the above will cost you a little more, and it’s up to you whether you think you need that level of coverage. Identity theft insurance can also be added to a tenants package.
Call for a no-obligation quote
The best way to know how all the particulars of your rental situation will affect your rate is to call an insurance broker. Our brokers are trained in asking all the right questions so that they’ll understand your risk profile, and you’ll understand what coverages are available, and how different combinations of coverage, deductibles, discounts etc. will affect your premium. That’s what we do. Call today!
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