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Understanding the Difference Between Renters and Homeowners Insurance

Whether you are looking to protect your personal belongings by investing in renters insurance in Toronto or are buying your first home, it’s important to understand the distinction between these two unique yet similar forms of insurance.

There is actually a big distinction between renters, condo and home insurance, and failure to understand these differences could cause you to make assumptions about what is and is not covered in your policy. These differences are outlined below:

Key Differences Between Home and Renters Insurance in Ontario

1.      Insurance Rates: Since owning a home is a big financial responsibility, a greater degree of coverage is required, and since you receive more coverage under a homeowners insurance plan than a renters insurance policy, you will pay more for home insurance. How much you will pay will be based on the size, details, and amount of coverage you need.

2.     Insurance Requirements: While home insurance is required to secure a mortgage from the bank or a mortgage lender, rental insurance is not mandatory. Renters do not need to have insurance, but it is a good idea to have it. If your rental unit or belongings were damaged due to a fire or other event, the building owner’s/ landlord’s insurance policy will not cover you. It is also worth noting that many rental companies are now requiring tenant insurance as part of their rental agreement.

3.      Insurance Coverage: The biggest difference between the two policies is what is and is not covered. Home insurance plans provide coverage for your home’s structure, property and personal belongings. However, rental insurance only protects renter’s personal items in case of damage due to fire, water, and other events. This is a key difference.

What About Condo Insurance?

Condo insurance in Toronto is another distinct form of home insurance that is specifically designed for condo owners. Since there is shared space, there are a number of important differences in coverage from a traditional home insurance plan.

Here is what you need to know about condo insurance coverage:

·         It provides you coverage for your personal belongings
·         It only provides coverage for structures that belong to you. This includes your unit’s ceiling, interior walls and flooring
·         It does not cover common areas in your building such as the pool, recreation rooms, the gym, or the exterior of the property
·         Similar to home insurance, you are required to have condo insurance to purchase a condo unit

These are the four key differences between condo and home insurance coverage. Whether you are renting, or buying a home or a condo, it’s important to understand the distinctions in coverage and ensure you have the right coverage for your living situation.

Each one of these policies is offered by Toronto home insurance brokers. If you have specific questions about your home insurance, don’t hesitate to contact me directly. Get a home insurance quote today! If you are a renter, get a tenant insurance quote
Posted: 2/4/2016 4:31:30 PM by Marianne Cipollone | with 0 comments
Filed under: broker, condo, home, insurance, tenant, Toronto

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