What every renter should know about insurance before signing a lease

You’ve finally found the perfect apartment. The floors are polished, the rent is reasonable, and the view isn’t just of a brick wall. You’re ready to move in and make it yours. But as you start picturing your couch against the wall and your coffee brewing on the counter, there’s one more thing you need to consider. It’s something that doesn’t come up in most apartment tours, but could make or break your finances: renter’s insurance, also known as tenant insurance.

It’s easy to overlook. After all, you’re not buying the building. You’re just living in it. Isn’t that the landlord’s responsibility? Aren’t your belongings replaceable anyway? And doesn’t insurance cost a fortune?

These are common assumptions. However, in this article, we’ll debunk some misconceptions about renter’s insurance.

Tenant insurance: A safety net in case of damages

Imagine this: it’s late. You draw a bath after a long day. You put your phone on the counter and step away for just a second to answer a message, maybe even throw in a quick load of laundry. Time passes. You forget. Water spills over, soaking your floor, seeping into the ceiling below, and causing thousands of dollars in damage—not just to your apartment, but to your neighbour’s unit as well.

Now what?

It’s time to contact your insurance company to determine the next steps, including filing an insurance claim.

What does tenant insurance cover?

Let’s be honest: most of us underestimate the value of our own belongings. A used couch, some second-hand kitchen appliances, a wardrobe you’ve built over the years. But imagine what it would cost to replace everything at once: your furniture, your clothing, your electronics, your books, your décor, your tools, your bike. It is inconvenient and potentially financially devastating.

Tenant insurance can cover exactly that. Insurance policies for renters include either “named perils” or “insured perils,” which provide protection for your personal property in the event of events like a house fire, theft, vandalism and other specified risks. For water damage, it depends on the type of damage and protection inclusions in your insurance contract.

And in many cases, it protects your belongings even when they’re not physically inside your apartment. Travelling? Visiting family? On campus? Many policies follow you wherever your stuff goes.

When you can’t return home immediately

Sometimes, something may happen that can render your entire apartment unlivable. You can’t stay there, but where do you go?

This is where many renters are caught off guard. If you think your landlord will foot the bill for your temporary hotel stay, think again. Their landlord insurance is designed to protect their building, not your living situation.

Fortunately, tenant insurance coverage systematically includes additional living expenses, which means it can cover the costs of temporary housing, hotel stays, and even meals while your apartment is being repaired. It’s a lifeline most renters don’t realize they need until they really, really do. Note that there are maximums, as stipulated in your insurance contract.

And even if the disaster wasn’t your fault, it can take time to process claims. In the meantime, you’re still expected to cover your own costs. Unless, of course, you’re already insured.

Why landlord insurance isn’t enough

This is one of the most persistent misconceptions about renting. While your landlord is indeed required to have landlord property insurance, their policy covers their investment, not yours. That means the structure of the building itself, including the walls, roof, plumbing, electrical systems and any fixed equipment, such as built-in appliances or ventilation systems. What their insurance does not cover is anything that belongs to you. Not your furniture, not your clothes, not your laptop, not your liability.

It’s a split responsibility. The landlord insures the shell of the space; you insure the life you build inside of it.

Shared living, short-term rentals and other gray areas

Things get even trickier when you add roommates into the mix. Many people assume that if one person has tenant insurance, everyone in the apartment is covered. However, the truth is, tenant insurance covers a renter at a very specific address. Unless every roommate is explicitly listed on the same policy, each person must take out their own tenant insurance policy. Keep in mind, however, that personal liability coverage follows an individual, regardless of the address.

If you’re renting out your place on a short-term basis through online platforms or subletting to a friend, don’t assume you’re covered. Not all standard tenant insurance policies cover short-term rentals. Also, the coverage can vary greatly depending on the provider. Before renting an apartment or handing over the keys, it’s worth making a call to your insurer to see whether you need additional protection.

Home insurance for tenants: More affordable than you think

If all this is starting to sound expensive, here’s some good news: renter’s insurance is one of the most affordable forms of insurance you can buy. Basic coverage often costs less per month than your cell phone bill, and in return, it shields you from tens of thousands of dollars in potential loss. It’s a small price to pay for peace of mind, especially when you consider how unpredictable life can be.

Still, many renters hesitate because they think they “don’t own anything valuable,” or because they assume they’ll never be in a situation where they’ll need it. Unfortunately, this is the kind of thinking that leaves people blindsided when something does happen. Fires, water damage, break-ins: they rarely come with warning.

Protect what you’ve built

Whether you’re moving into your first apartment on your own, a professional between cities, or a couple setting up your new home, tenant insurance is one of the simplest, smartest steps you can take to protect your space, your stuff and your sanity.

You’ve worked hard to make your apartment feel like home. Make sure it’s protected…no matter what happens next.