What is tenant insurance in Canada and why do renters need it?

With files from Jordan Lavin

This post was originally published on November 21, 2023, and updated on May 22, 2026.

When you rent in Canada, you are not responsible for insuring the physical structure of the property, as you would be when you own a house. But what about all of your belongings inside the home and your personal liability? 

This is where tenant insurance, also called renters insurance, comes in. It is a type of insurance policy designed to protect tenants against financial losses if their contents are damaged or stolen, or if someone is injured on the property. 

Despite this, many tenants choose to skip insurance altogether. A 2021 survey from TD Insurance shows that 41% of Canadian renters do not have tenant insurance. For those who do have coverage, 49% said it was because their landlord required it. 

The reality is that renting without insurance leaves you vulnerable to risk. Keep reading to learn what tenant insurance is and why it is essential for renters in Canada.

Is tenant insurance mandatory in Canada? 

No, generally speaking, any type of homeowner's insurance, including tenant insurance, is not required by law in Canada. However, most landlords require their tenants to carry a minimum level of coverage as a condition of the lease. 

Even if a policy isn't a condition of your lease, you should still consider purchasing coverage to protect yourself ahead of time. You wouldn't want one housing stipulation to put you in long-term financial trouble. 

How much does tenant insurance cost?

Tenant insurance in Canada is usually inexpensive. Basic policies are advertised as low as $10 per month, but most Canadians require more coverage than a $10 policy can provide. Realistically, you can expect an adequate renters insurance policy to cost between $20 and $50 per month.

What you’ll pay for insurance depends on several factors, including your location, property type, your claims history and your coverage needs. You may find that your tenant insurance quote comes in higher if you have additional needs that require extended coverage. For example, a basic home insurance policy has limits on items like jewellery, fine art, and even bicycles. If you have valuables that exceed your policy limits, you may want to add an endorsement to cover them in full. The more endorsements you add to your coverage, the higher your premium will be.

What does tenant insurance cover?

Renters insurance covers your expenses for three major categories: loss or damage to the contents of your home, third-party liability, and the cost of additional living expenses if your home becomes unlivable because of an insured peril like fire or flooding.

Contents insurance for tenants

This covers your belongings that might be damaged by a disaster or stolen from your rental space, including your clothes, electronics, appliances and furniture. Without contents insurance, you’ll pay out of pocket to replace your damaged or stolen items. Most home insurance companies recommend a minimum of $30,000 to $40,000 in coverage to ensure that all of your items are protected. 

If you have large collections or expensive valuables, you may need to name them on your policy and pay a slightly higher monthly premium. Keep in mind that your insurance provider may require receipts or photos as proof of ownership.

Renters liability insurance

Liability insurance covers you in case you are sued for damage to other units from flooding or causing a fire that spreads to other apartments. It also protects you in case someone injures themselves or damages their property in your unit and sues you to recoup their expenses. Most policies start coverage at around $100,000, but it’s wise to increase that coverage to at least $1-million if you can afford it.

Additional living expenses 

This coverage pays for your extra costs in case you’re unable to live in your home because of damage caused by an insured peril like fire, smoke or flooding. Some tenant insurance policies also extend additional living expenses coverage to include evacuation orders. Common covered expenses include hotel stays, restaurant meals, transportation, laundry, storage, and utilities.

What does tenant insurance not cover?

Tenant insurance covers you in the event of a loss, but that coverage has its limits. Most tenant insurance policies exclude:

Subletting your place: Most policies will not cover you if you sublet (or Airbnb) your rented unit to somebody else. If that person does not get his or her own tenant insurance, you are carrying the risk on your own. This is especially important when it comes to a third-party liability claim.

Your roommates: Your tenant insurance policy only extends to those who are specifically named on it. If your roommate causes a fire or loses contents, your policy will not extend to them and vice versa.

Actual cash value vs. replacement costs: Your renters insurance may provide different coverage based on which of two insurance calculations is used to determine the value of your items:

• Replacement costs: An insurer will pay you enough to substitute your damaged item with a similar one at today’s costs. For example, if your 10-year-old sofa were damaged by smoke, insurance would pay for you to get a similar new one. 
• Actual cash value: An insurer considers what you would pay for that item today and subtracts any depreciation. For example, your insurance company might give you $200 for your 10-year-old sofa, and you would be responsible for the difference.

Replacement cost coverage is marginally more expensive than cash value coverage for contents, and usually well worth the few extra dollars a month.

Why don’t tenants buy renters insurance?

A major reason Canadian renters skip tenant insurance is a lack of understanding of what it covers. For example, many tenants believe they are covered under their landlord’s policy. Others believe they don’t have enough valuables to warrant buying coverage. Here are a few reasons why renters don’t buy insurance:

1. It’s too expensive

Many people believe that renters insurance is too expensive and would rather save the money they’d spend on a premium. While most renters in Canada are justified in wanting to save money, tenant insurance is one of the most affordable forms of coverage you can get. This type of insurance policy can start as little as $10 per month, meaning that you can likely get basic protection at a price well within your budget.

2. I have nothing to protect

Many people underestimate how much it would cost to replace all of their everyday items. For example, if all of your clothes were damaged or your laptop, television, and couch were stolen, replacing them would add up quickly. Without insurance, you’d have to pay out of pocket, which could easily cost you thousands of dollars. 

3. I’m covered under my landlord

If you believe you are protected by your landlord’s insurance policy, you are mistaken. While your landlord will likely have coverage for the home itself, it won’t cover any of your items (contents) or your liability. If you were to cause a flood or fire that leads to damage in other units, your landlord’s insurance policy wouldn’t cover you.

Do I need tenant insurance as a newcomer to Canada?

The short answer is yes. While it is not mandatory by law, tenant insurance is a financial safety net and an essential part of settling into your new home.

If you’re wondering whether purchasing tenant insurance is worth the cost, here are a few considerations to keep in mind: 

Also read: How tenant insurers lower risk for renters and landlords

Protection of valuables: Like many newcomers, you may have brought essentials with you when moving to Canada, such as clothes, electronics, and documents. Tenant insurance protects these items against fire, theft, or water damage. It can also protect big-purchase items you’re likely to make, including furniture and appliances. This protection is particularly important if replacing valuables will be a significant expense for you. 

Liability coverage: If you are held responsible for damage to your rental unit or injuries that happen within it, liability insurance can protect you from bearing the full financial load in the event of a lawsuit. Affordable renters insurance offers peace of mind for newcomers to Canada and financial security in case of unexpected events.

Meeting expectations: Landlords may ask for proof of tenant insurance as a condition of the rental agreement, and failure to obtain it could result in the termination of your tenancy. As a newcomer, understanding this expectation beforehand can simplify the process of securing housing. Additionally, obtaining tenant insurance is an excellent way to familiarize yourself with Canada’s financial systems, explore insurance providers, and better understand your rights and responsibilities as a renter. 

Also read: Your rights as a renter in each province. 

Investing in tenant insurance is a wise decision for newcomers, one that will keep you protected as you begin to build your new life in Canada.

Visit our guide for more information about insurance for newcomers to Canada. 

The bottom line

Tenant insurance is important coverage that protects you and your belongings when you’re renting a home. Without a policy, you’d be responsible for paying for any damage or replacements to your belongings out of pocket. It also provides essential protection against liability if you cause damage or if someone is injured in your home. Tenant insurance is typically affordable and could save you thousands of dollars in unexpected fees if a disaster were to happen. Compare tenant insurance quotes online to find the best price on the coverage you need.

Also read

• 3 reasons why renters need to buy tenant insurance
• The difference between homeowner, landlord, and tenant insurance
• Does renters insurance cover me if I rent my apartment on Airbnb?
• How tenant insurance helps landlords lower their risk