THE KEY
TENANT’S INSURANCE RESPONSIBILITIES IN STRATAS By Cassie Ayers, Team Leader, Personal Insurance, Acera Insurance, and Danielle Russell, Director, Real Estate, Acera Insurance today’s prices. When choosing a contents limit, tenants should consider the current market cost of replacing each item. We recommend tenants take a video of their belongings, room by room, to help identify what needs to be replaced in the event of a claim. Additionally, the contents limit directly impacts the additional living expenses coverage available, making it an essential consideration when selecting a policy.
While previous articles in The Key have outlined the insurance responsibilities of strata owners and councils, this piece focuses on tenants’ insurance obligations. When landlords and tenants are aware of their respective responsibilities, property management runs more smoothly, disputes are minimized, and all parties are better protected.
THE THREE KEY PLAYERS IN A STRATA COMMUNITY A successful rental experience in a strata property requires collaboration among three key stakeholders: • Strata council, which is responsible for managing the common areas, enforcing bylaws and maintaining strata insurance. • Strata unit owner (the landlord), who maintains appropriate rented owner’s unit insurance, as well as ensures that their tenants comply with strata rules and obtain tenant insurance. • Tenant (the renter), who is responsible for following strata bylaws and securing tenant insurance for personal protection. Each of these groups has specific insurance responsibilities, and understanding these roles helps prevent conflicts and unexpected costs.
TENANT INSURANCE RESPONSIBILITIES
Coverage for additional living expenses Additional living expenses help tenants cover temporary accommodation and related costs if their rental unit becomes uninhabitable due to an insured loss, such as a fire. This coverage is typically set as a percentage of or equal to the contents limit on the tenant insurance policy. Given the high costs of the rental market, this highlights the importance of selecting an adequate contents limit to ensure sufficient coverage for both belongings and additional living expenses. Coverage for personal liability Personal liability coverage can protect a tenant if they unintentionally injure someone else or damage someone else’s property. The protection offered is far reaching — it’s not limited to incidents within the rental unit or strata building, but anywhere in the world. The importance of endorsements Common risks that a tenant insurance policy covers include fire and smoke, water damage caused by burst pipes or leaking appliances, theft and vandalism. But it doesn’t include damage caused by flooding, sewer backups or earthquakes. Fortunately, tenants can enhance their policy by purchasing the following endorsements: overland water (flood), sewer backup, earthquake.
Many tenants mistakenly believe they are covered under their landlord’s insurance. This is not the case. Renters must obtain their own tenant insurance policy to ensure their personal belongings and liability are protected.
For example, if a renter’s belongings are damaged or their unit uninhabitable following a flood, their insurance would only cover their contents and additional living expenses if their tenant insurance policy includes the overland water endorsement.
Here is an overview of what a comprehensive tenant insurance policy includes:
The endorsements listed above may not be available in all areas or to all individuals, so speak with an insurance advisor to learn more.
Coverage for personal belongings A tenant policy provides contents insurance, covering the cost of replacing a renter’s belongings if they are damaged or destroyed by an insured loss. This includes everything from furniture and electronics to clothing, kitchenware, food, and medication. Many renters underestimate how quickly replacement costs can add up and select a contents limit that is too low to replace their belongings at
12 | SPRING 2025
TENANTS’ ROLE IN PREVENTING DAMAGE AND RISKS Tenants must also take proactive steps to minimize damage and avoid costly claims. This includes: • Using appliances properly to prevent fire hazards or water leaks. • Reporting maintenance issues promptly to prevent minor problems from becoming major repairs.