Part 3: The benefits of additional living expenses, loss-of-use tenant insurance coverage

Tenant insurance covers a lot perils and can make for a much more peaceful and pleasant building.

However, while a landlord cannot force a renter to purchase insurance, they can educate and inform tenants about the benefits and relatively small cost such a policy can offer, especially in the area of loss-of-use coverage.

High density living means more risk to house and home

Apartment, condominium, townhouse and other forms of multi-unit housing requires that people live in close proximity.

Tenants pass their neighbours in the hallways, on sidewalks in the garage and lobby. There are shared common spaces, shared responsibilities, rights and obligations. There is also an increased risk of accidents, problems and damage including fire, flood and smoke damage.

In the worst case, a disaster can occur, damaging destroying or otherwise making a housing unit or building uninhabitable. If tenants have all their possessions - possibly money - tied to their rental unit, where do they go in case of disaster?

With properly structured, relatively low-cost rental insurance, tenants can protect themselves from such incidents with additional living expense coverage.

Additional living expenses - sometimes referred to as loss-of-use coverage - is usually part of a tenant or rental insurance policy. These include hotel bills, restaurant meals and moving costs. This coverage pays for unexpected expenses when you cannot live in your apartment due to a covered loss. It is subject to certain limits.

What is paid for under additional living expense tenant coverage?

A lot. The coverage can pay for hotel and restaurant bills, rent and other expenses necessary to maintain your normal standard of living.

Restaurant meals

If, after evacuating a damaged housing unit the tenant doesn't have access to a kitchen, they can claim extra expenses for eating out. While there can be exceptions, once the tenant is in a new residence with a kitchen, the insurer does not usually reimburse for restaurant meals.

Hotel and temporary residence

If forced out of a rental unit, tenants with insurance will not be left out in the cold or on the street. The insurer will arrange hotel accommodations comparable to the tenant’s lifestyle. Quite often this accommodation will be in residence hotels equipped with kitchens. If the displaced tenant is out of their primary residence for more than 30 days, the insurer will try to place them in a temporary home to limit higher-cost hotel stays.

Laundry, furniture, furnishings, storage, pets, transportation and utilities

If the tenant had a washer and dryer in their unit, they can claim expenses for laundry services while they are staying in a hotel. Likewise, the insurance company will pay to furnish a temporary house so as the living space is comparable to the tenant’s own home. The additional costs to travel to work, school and appointments are also covered if the distance is further and any additional heating and utilities costs can also be claimed if they over and above what the renter would typically pay in their primary residence. Pet boarding costs and storage costs are also covered.

Tenant insurance can make for a less stressful building. Tenants with proper, low-cost insurance are less likely to lash out or become resentful when faced with a damaged living space or displacement. Knowing they have protection in place can make incidents of significant property damage such as flooding, fire or smoke damage much easier to deal with. The fact a third-party insurer can step in and handle the many complications associated with emergency housing and living expenses will allow the landlord or property manager to better respond to emergency situations, facilitating repairs and returning the property to a livable state.