Residential Tenants’ InsuranceThis presentation is accompanied by a more complete paper.

Prepared for 4th Annual Ottawa Tenants’ Conference,

Saturday, September 2010Paul Rapsey, Clinic Resource Office, Legal Aid Ontario

Main Issues to be Addressed

1. What is Tenant Insurance?

2. Should a tenant have tenant insurance? 3. Can a tenant be required by a landlord to

have such a policy.

4. What are the consequences for a tenant when the tenant does not have such insurance?

What is “tenant insurance”?

Two types: Content’s insurance

Protects tenant’s possessions regardless of whose fault damage is

Can also compensate tenant for incidental expenses (hotel, meals, travel, medical etc.)

Liability insurance Protects tenant against claims for compensation

by other people where tenant is responsible for damage

Know what is included or excluded Example of questions to ask an insurance broker:

Who is covered by the policy (tenant, spouse, children, occupants, guests, pets etc.)? Are jewellery or heirlooms covered? What about artwork? What about pet expenses? (vet, kennel etc.) Whose property is covered (tenants, household members, guests, landlords,

neighbours etc.) What are the excluded "perils" (example – is damage caused by pets or smoking

excluded from coverage)? If so called "acts of God" are excluded, exactly what are these? Is it the full replacement cost that you will be given or a lesser amount? Is personal injury covered –

for yourself as tenant, for your family, or roommates living with you, for guests, for other people you may have harmed (including the landlord, neighbours or

strangers)? Are medical bills covered and if so which type and up to what monetary limit? Is time off work – lost wages – covered? Is alternate accommodation covered (hotel, motel, shelter)? What other expenses that you may incur are covered (transportation, storage,

cleaning, repair etc.)?

Should a Tenant have Insurance? Yes

No guarantee landlord will be able to pay promptly or at all, even if landlord is responsible

Protects tenant from financial ruin if tenant is liable to others for damage.

Minimizes risk of eviction if tenant will have money to cover landlord’s losses, where tenant liable for damage.

Liability insurance may be legally required by lease.

Unpaid damages may preclude tenant from obtaining future social housing

Premium could be covered by social assistance shelter allowance.

No Cost is the main

consideration for low income tenants.

Value of contents may not be sufficient to warrant contents insurance.

Risk of financial liability may not be a concern for some tenants, especially if their income is protected from seizure (Example: CPP, OAS, OW, ODSP).

$ - The Cost - $ Cost will vary depending on risks and insurance company Shop around Risk factors affecting cost:

neighbourhood crime level, the age of the building, the age of the electrical wiring or heating and plumbing systems, whether the structure is of wood or brick, how close the nearest fire station or police station is, whether the property is urban or rural, whether there is an monitored alarm system or other security system, whether you have made other insurance claims in the past, amount of deductible you choose, whether you have other types of insurance (example – car insurance) with the

same company, whether you have been a long time customer of the insurance company, whether you are a smoker, (non-smoker often get a discount), your age – e.g., "seniors" will sometimes be eligible for discounts (the age at

which the discount applies may vary from age 55 to age 65).

How might damage occur? Examples of situations where damage, injury or loss can occur:

fire in the rental unit or building; flood; contamination (example: of drinking water) wind damage; dust and debris (from repair or maintenance work); chemicals; vermin, cockroaches, bed bugs, fleas etc. water leaks; mould; structural damage; break and enter; theft; assault; robbery; vandalism; slip and fall injuries.

Landlord’s Insurance

It is likely the landlord will carry some insurance, BUT It is not necessarily the case that the landlord's

insurance policy will cover any or all of the tenant's or the tenant's household's losses even if the landlord is legally responsible for the damage or injury.

AND If damage is the responsibility of tenant, then landlord

insurer will likely go after the tenant for payment of damages

Landlord’s Main Obligations under Residential Tenancies Act A landlord must

provide accommodation that is in a good state of repair. provide accommodation that is fit for habitation. provide accommodation that is in compliance with various

health and safety standards. refrain from interfering with a tenant's reasonable enjoyment

of the rental accommodation and common areas.

Any damage the tenant, the tenant's possessions or the tenant's household suffer as a result of a breach of any of these four obligations could result in the tenant being awarded monetary compensation.

Tenant’s Liability A tenant is liable

only if the damage is caused by the tenant another occupant of the rental unit (e.g., members of tenant’s household – e.g.,

spouse, child, parent) a guest of the tenant (that is someone the tenant permits onto the premises). a pet for which one of the above people is responsible.

where damage done wilfully (intentionally) or recklessly by one of above where damage done negligently (carelessly) by one of above

A tenant is NOT liable for damage done by reasonable wear and tear (that is through ordinary use of the

premises) pre-existing damage damage done by strangers damage for which the landlord is responsible.

Unless a tenant has the ability to repay the landlord when the damage is the tenant’s responsibility, the tenant is usually evicted in these situations, making the situation many times worse

Tenant’s Responsibility When Damage Occurs A tenant must act reasonably when damage

occurs, even if it occurs as a result of the landlord's breach of the landlord's legal responsibilities.

A tenant has the obligation to make reasonable efforts to minimize any harm.

A tenant should notify the landlord as soon as any damage occurs regardless of who is ultimately going to be responsible for that damage.

Losses a Tenant could suffer Regardless of whose fault the damage is, here are some of the losses/expenses

a tenant may have: clothing, jewellery, cash, furniture and accessories, personal equipment (appliances, cameras, computers, television, DVD, CD,

sports gear, etc.), landlord's property (appliances, furnace, lighting, garden, fences, building), neighbour's property, staying somewhere else - if the damage is very serious, meals out if unable to cook at home, mileage or other transportation, repair damage to car or other vehicle (in parking lot or garage), personal injury (self or other person), lost wages, hiring repair person (plumber, electrician, painter, other contractor,

housecleaner, cleaning of furniture, clothes etc.).

Proof of loss required

It is not usually good enough to simply state what you have lost, the tenant will usually need good evidence of the losses.

Keep a record of items you own with descriptions, warranties, serial numbers, and receipts.

Photographs/videos of your possessions are a good source of evidence of the condition of things before they were damaged, destroyed or lost. Store in safe place – e.g., internet site

After damage has occurred, again take photos/videos of the damaged item(s) to show its damaged condition.

Obtain written estimates regarding the replacement or repair costs.

Can a Landlord Require a Tenant to Have Insurance? Depends on type of insurance:

Content insurance – No Liability insurance – Yes, but

only for damage the tenant is responsible for, and

only if required by tenancy agreement (lease)

NOTE: See handout paper for more complete explanation.

What if I don’t get insurance I am legally required to have? If this is a condition of tenancy, then

if you have not moved in, landlord could refuse to let you move in;

if you have moved in already, landlord could apply to the LTB to evict you on the basis that the failure to have insurance to protect the landlord from future harm you are responsible for is a “substantial interference” with a “right” or “interest” of the landlord.

Always get legal advice if possible.

If an issue about insurance arises between a tenant and a landlord, the tenant should obtain some legal advice based on the particular facts of the situation.

Generalizations in the absence of specific facts of the situation are dangerous forms of advice.

The End