Insurance protects you from financial problems resulting from damage or loss, either to yourself or to your property. Protecting your property should be an important part of your financial plan – even if you rent your home or apartment.
The top five reasons to buy property insurance
1. You can cover the cost of replacing damaged or stolen property.
Let’s say there is a fire in your home. Insurance helps you rebuild and replace all the items that were lost in the fire.
Tip: Even if you rent, you need insurance to protect your possessions against fire and theft. Also, your landlord’s insurance will not cover any upgrades you make to your place, like buying a new carpet, or adding built-in shelves. You should insure these kinds of upgrades.
2. You can repair or replace your car if you get in an accident.
Not only that: you can’t even buy or drive a car without insurance for it.
3. You can protect yourself and your family.
If someone gets hurt at your home or by your car, they could sue you. If they win their lawsuit and you have to pay a lot, it could take years to pay off the debt. You may even go bankrupt.
4. You can cover the costs if you damage someone’s property by accident.
Let’s say you live in an apartment building and your bathtub overflows. Who will pay for the damage to your neighbour’s ceiling? Your insurance will, if you have it.
5. You can cover extra costs if your home or car gets damaged.
If your home burns down, you can’t live in it while it’s being rebuilt. Insurance will pay for a hotel, restaurant meals, and storage. If someone wrecks your car, it will help pay for a rental car while yours is being fixed.
Remember: Everyone needs insurance, even people who rent
The cost of not having insurance is just too high. Insurance protects you from the financial impact of big losses. It should be part of each person’s financial plan.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.