Tenant Insurance: Why It's Mandatory

Mandatory in Most Leases

Under the Residential Tenancies Act, landlords cannot require 'security deposits' from tenants. However, they CAN require proof of tenant insurance in the lease agreement.

• The Clause — If the lease requires tenant insurance, the tenant must have it and maintain it.
• The Benefit to the Landlord — Insurance provides coverage for damages caused by the tenant (e.g., accidental water leaks, fires).
• The Benefit to the Tenant — Insurance protects your contents and provides liability coverage if someone is injured in your unit.

What It Covers

• Contents Coverage — Pays to replace your personal belongings (clothes, furniture, electronics) if they are stolen or damaged.
• Liability Coverage — Pays for legal defence and damages if you accidentally cause property damage or injury to a third party.
• Additional Living Expenses — Pays for your hotel or temporary housing if your unit is uninhabitable due to a fire or flood.

Proof of Insurance

• The Certificate — You must provide the landlord with a certificate of insurance upon request.
• Cancellation Notice — Most policies require the insurance company to notify the landlord if the policy is cancelled.
• The Consequence — If you cancel your insurance, the landlord can apply to the LTB to terminate your tenancy for breach of the lease.