Residential Tenants` Insurance

Report
Residential Tenants’
Insurance
This presentation is accompanied by a more complete paper.
Prepared for
4th Annual Ottawa Tenants’ Conference,
Saturday, September 2010
Paul 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:
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Content’s insurance
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Protects tenant’s possessions regardless of
whose fault damage is
Can also compensate tenant for incidental
expenses (hotel, meals, travel, medical etc.)
Liability insurance
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Protects tenant against claims for compensation
by other people where tenant is responsible for
damage
Know what is included or excluded
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Example of questions to ask an insurance broker:
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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 –
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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
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 No
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.
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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 - $
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Cost will vary depending on risks and insurance company
Shop around
Risk factors affecting cost:
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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:
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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
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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
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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
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only if the damage is caused by
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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
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damage done by reasonable wear and tear (that is through ordinary use of the
premises)
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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
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Regardless of whose fault the damage is, here are some of the losses/expenses
a tenant may have:
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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.
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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
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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

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