What every renter needs to know about tenant's insurance

One of the first things that often comes to mind after hearing about a fire like the one at 650 Parliament Streetafter everyone's safety, of courseis, do residents have insurance?

While speaking with dozens of tenants outside the St. James Townhighrise, many told CBC Toronto that they don't have apartment insurance and are worried about where they're going to livenow that the Red Cross has stoppedproviding hotel rooms.

Manisha Masih is one of them. She was put up at the Sheraton Hotel.

"My husband gave me the form to fill in, I forgot to fill it and now we don't have insurance," said Masih."I don't know what to do."

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She saidshe is hopingto stay with friends, and is looking for a short-term rental.

"It's pretty awful and depressing, physically and mentally. It's a lot of pressure right now," said Masih.

Insurance is more than just your belongings

According to the Insurance Bureau of Canada (IBC), Masih's situation is common:only about 50 per cent of Ontarianswho rent have tenantinsurance. One of the reasons is many think their landlord's insurance covers them, as well. But the IBCsays that's a misconception, becausea landlord's insurance covers the structure of the apartment, not the contents within it.

Another reason, says Pete Karageorgos, the IBC's director of consumer and industry relations for Ontario, is people often think about insurance in terms of their belongings beinglost to fire, flood or theft. Many renters think their material possessions aren't worth much, so they skip on insurance entirely.

"But there's also coverage for your additional living expenses if you've been displaced from your apartment because of an event like a fire or flood," said Karageorgos.

In the case of 650 Parliament Street, "there could be some residents who don't have fire or smoke damage. But just the very fact that there's no power in the building and the authorities have prohibited access, they need alternate living accommodations and most tenant insurance would cover that," said Karageorgos.

Make sure you can pay the deductible

Sandeep Shah thought the chances he'd have to use his insurance were slim. He got a package that cost him about $20 a month.

"It's a $5,000 deductible. I can't afford to pay that," said Shah. "I even don't spend that much in a month."

Right now, he's staying with friends and sayshis coverage is confusing. That'sa word tenant and landlord lawyer Caryma Sa'doften hears when it comes to insurance.

"People don't understand their policies or the conditions," said Sa'd. "There are three major components to a policy that are worth examining."

Understand what clauses nullify your policy

The first, says Sa'd, is your personal belongings. How much do you want covered and what is the company willing to pay?The second is living expenses while an insured loss is being taken care of and that includes hotel costs. The final category is personal injury and liability so if someone gets injured inside their apartment or leftthe tap on and the units below getflooded.

Sa'd says when all is said and done, make sure to read the clauses carefully to see "which conditions would void the policy."Those clauses also vary. For instance, onemight not have coverage if they're found to be at fault.

When it comes to choosing the right type of plan, the IBC recommends narrowing down your needs and asking a lot of questions.

"Tenant insurance can be very affordable. Shop around and make sure the package meets your needs," saidKarageorgos, adding that policies generally range from a few hundred dollars a year to a few thousand.

The Insurance Bureau of Canada offers free and unbiased advice on all types of insurance.