Real Estate

High deductable, liability only tenants insurance?

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  • May 10th, 2019 3:59 pm
Deal Addict
Jun 19, 2007
1618 posts
2254 upvotes
Halifax

High deductable, liability only tenants insurance?

Does such a thing exist? I'm currently renting, and been without tenant's insurance for a while as I can self insure, but think I should get it in case I do something really big and stupid like burn the house down. The down side of having assets is it's something for people to come after when you screw up.

I fiddled around with a few calculators, and it seems like there is no option to reduce belongings down to 0 (min is 25k), and no option to make a deductible higher than 1k.

Essentially what I'm looking for is a holy shit catastrophe policy, say $1-2m, with maybe a $10-50k deductible. Anyone know if such a things exist and where you can get it?
5 replies
Deal Addict
Apr 6, 2008
1807 posts
1168 upvotes
Where are you located? Different provinces have different rules. Tenants insurance is usually only belongings and liability. Having your contents for 50,000 or so and say a million liability is quite reasonable. Are you looking to cover the house as well? If you rent, it's the landlord's responsibility to cover the building itself. As far as liability insurance, short from someone slipping on your front steps, or your dog biting someone, what realistically could happen that would cause more then a million dollars damage? Even upping it to 2 million is still pretty reasonable.
Deal Addict
Jun 19, 2007
1618 posts
2254 upvotes
Halifax
fusion2k2k wrote: Where are you located? Different provinces have different rules. Tenants insurance is usually only belongings and liability. Having your contents for 50,000 or so and say a million liability is quite reasonable. Are you looking to cover the house as well? If you rent, it's the landlord's responsibility to cover the building itself. As far as liability insurance, short from someone slipping on your front steps, or your dog biting someone, what realistically could happen that would cause more then a million dollars damage? Even upping it to 2 million is still pretty reasonable.
I'm in NS. Basically I figure I only need liability tenant's insurance. Having the place burn down or otherwise be destroyed through my own fault is my main concern. Presumably as you mention LL would cover the building with his insurance, but if I were at fault (left a candle going or whatever) I presume that his insurance would then proceed to sue me? As I have the liquid assets to pay for the house, it would change my financial situation from "comfortably ahead", to "should probably start looking for a job".

Again, I'm only looking for the "holy shit" situation insurance. I was able to get a health insurance plan for a year of international travel a few years ago, and was able to reduce my premium on the plan they suggested by almost 75% by going from a $100 deductible to a 25k deductible, but can't seem to find anything equivalent for tenant's insurance.
Deal Addict
Apr 6, 2008
1807 posts
1168 upvotes
seadog83 wrote: I'm in NS. Basically I figure I only need liability tenant's insurance. Having the place burn down or otherwise be destroyed through my own fault is my main concern. Presumably as you mention LL would cover the building with his insurance, but if I were at fault (left a candle going or whatever) I presume that his insurance would then proceed to sue me? As I have the liquid assets to pay for the house, it would change my financial situation from "comfortably ahead", to "should probably start looking for a job".

Again, I'm only looking for the "holy shit" situation insurance. I was able to get a health insurance plan for a year of international travel a few years ago, and was able to reduce my premium on the plan they suggested by almost 75% by going from a $100 deductible to a 25k deductible, but can't seem to find anything equivalent for tenant's insurance.
I'm in Ontario so things may be different. If all you need is contents and liability insurance, make a phone call and get it done. It's cheap insurance even with a low deductible, so why bother going with a high deductible? Out here it's like $30 a month and if you bundle with auto insurance it's usually free because you get the equivalent discount on the auto policy.
Deal Addict
Jun 19, 2007
1618 posts
2254 upvotes
Halifax
I don't need contents insurance though, but every policy I'm looking at doesn't seem to have the option to remove it. Why would I pay for something that I can simply self insure for at less than half of the expected cost? Same reason why if you can afford to replace your car, it doesn't make sense to buy anything other than liability. Given that the bulk of claims I'm sure are for piddly crap like "my TV got stolen", I would assume that the majority of the $30/mth is to cover that sort of thing.

Bottom line is that like roulette or the lottery, insurance is a mug's game where you expect, and are very likely to lose money over the long haul, and you're fiscally prudent to get as little as you can get away with financially. This is the exact reason why big companies self insure all their autos. Because they can eat a $2m loss and not feel it, and it will be far cheaper over the long run to not essentially pay the same money they would in losses, except via premiums, + admin costs + profit to the insurance company.

Given that the EV of every dollar paid towards insurance is something like $0.40, you should try to minimize it. I largely subscribe to this guys views on insurance:

https://www.mrmoneymustache.com/2011/06 ... d-at-math/

Essentially there are only 3 times when you should buy insurance.

1) It's mandated by law (eg car insurance)
2) The non-financial aspect of the loss is too great to bear (ie in this case having to pay $700k out of pocket would mean a forced return to work, or if you have no emergency fund, a $1000 pet bill would mean the death of your pet)
3) The actuarial model has drastically misjudged your risk profile, and you stand to cash in. (ie in the US you plan to try for a baby in next couple years, so expect to incur more expenses than insurance would cost).
Deal Guru
User avatar
Mar 23, 2008
13006 posts
10009 upvotes
Edmonton
seadog83 wrote: Does such a thing exist? I'm currently renting, and been without tenant's insurance for a while as I can self insure, but think I should get it in case I do something really big and stupid like burn the house down. The down side of having assets is it's something for people to come after when you screw up.

I fiddled around with a few calculators, and it seems like there is no option to reduce belongings down to 0 (min is 25k), and no option to make a deductible higher than 1k.

Essentially what I'm looking for is a holy shit catastrophe policy, say $1-2m, with maybe a $10-50k deductible. Anyone know if such a things exist and where you can get it?
If you talk to a few different brokers and they all tell you the same thing, then you're basically down to two options. Self-insure EVERYTHING (which seems like an unnecessarily high risk) or pay a bit more per month than you'd like and over-insure your situation. Perhaps the insurance companies don't find your desired policy structure to be lucrative enough for their tastes to make it worthwhile.

IOW, pick up the phone and talk to some actual people instead of putzing around with the online calculators. They're designed to handle the 95% cases, which you fall outside of, apparently.

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