Tenant Insurance in Ontario: Should Landlords Require It?

Tenant Management Essentials

Many Ontario landlords now require tenants to carry renter's insurance — understanding the rationale and how to implement the requirement protects both parties.

Tenant insurance (also called renter's insurance) covers the tenant's personal belongings and personal liability. If the tenant's belongings are stolen, damaged by fire, or lost in a flood, their tenant insurance compensates them. More importantly for landlords: tenant liability coverage can respond to claims arising from the tenant's negligence.

Screening and Placement

The most common landlord insurance scenario where tenant insurance is relevant: a tenant forgets to turn off a bathtub tap, flooding damages the unit and a neighbouring unit. The landlord's building insurance covers the building damage. But the tenant's liability policy can respond to the claim for the landlord's deductible and the insurance premium increase that results from the claim.

Ontario landlords can require tenant insurance as a condition of tenancy by including the requirement in the lease. The clause should specify: a minimum liability coverage amount (typically $1 million or $2 million), proof of coverage before occupancy, and maintaining coverage throughout the tenancy.

Retaining Quality Tenants

Enforcement is the practical challenge. Obtaining proof of insurance at lease signing is straightforward, but verifying continued coverage throughout the tenancy requires a process — typically annual confirmation or providing the landlord as additional insured.

Tenant insurance is inexpensive — typically $15 to $25 per month for a standard policy in Ontario. Most tenants who don't have it are unaware of it or haven't been asked to get it. A landlord who makes the requirement clear and provides guidance on obtaining it usually encounters little resistance.