With the start of new school year, thousands of college and university students are moving in to rental accommodations near campuses all over Canada.
In their rush to set up their study nooks, stereo systems and beer fridges, young people seem to neglect obtaining proper insurance for their rented dwelling. According to a recent study by TD Insurance, 47% of Canadian tenants under age 35 do not have renter’s insurance.
While most young people and especially students live on shoe-string budgets and must forego the luxuries, the cost of being underinsured could be far greater than the insurance premiums. Given the ever-increasing value of textbooks, personal electronics and designer clothes, young people would be hard-pressed to readily replace such items if they were damaged by water, smoke or fire. An alternative place to stay while repairs are made is another potential expense that might strain a student’s budget.
Last, but not least, the potential liability from a negligent act or omission could devastate a student’s financial position and cause a major distraction during studies. An everyday example of the need for liability insurance is a tenant in a condominium unit who causes a flood by leaving the bathtub running or causes a fire by leaving the toaster or stove unattended, resulting in damage to the unit, common elements and neighbouring units. In these cases, the condo corporation’s insurance will cover the cost of repairing the units and common elements but the corporation may back-charge its deductible amount to the owner of the unit where the damage originated. That owner may then look to their tenant for reimbursement of the corporation’s deductible amount, which could range from $2,500 to over $50,000. The tenant must then add the cost of finding alternative housing and replacing their personal property.
While the responsibility to obtain proper insurance ultimately rests with tenants and unit owners, condo corporations always benefit when residents of all ages and stages are properly insured because they face fewer disputes, lawsuits and other costly headaches when nasty situations are covered by insurance. Condo boards and managers should therefore take steps to remind unit owners and tenants what coverage is available under the condominium’s insurance, what is excluded and that residents should obtain professional advice to adequately protect themselves, their personal property and their financial security.
Check out our December 2008 post on the importance of condo corporations educating their unit owners about carrying proper insurance and some tips on spreading the word.