I’m trying to put a positive spin on the idea of already overburdened renters paying up to $400 or so per year for tenant insurance: If you owned a house, you might pay three or four times that much.
Rent is expensive in many cities and rising quickly. Let me try to convince you why paying an extra $15 to $40 per month for insurance is worth it.
First, tenant insurance covers the stuff you own if it’s damaged by fire or stolen. Second, you’re protected against repair costs if you inadvertently damage your unit or a neighbouring one.
Third, tenants insurance protects you from liability related to injuries that happen in your home, and damage you accidentally caused. Also covered are some degree of living costs if you have to move out of your home while repairs are done. One more type of available coverage is for damages caused by identify theft.
Some tips to make sure you get the right coverage:
- Do an inventory of your possessions and use the total value when indicating how much coverage you want.
- Aim for insurance that covers the replacement cost of your possessions, not the cash value after depreciation.
- Go for $1-million in liability coverage to ensure you’re well protected.
- If you live at ground level, check into coverage for overland water damage.
- Choose the right deductible – a low deductible will cost you more per month
- Finally, compare costs using online quotes or contacting brokers. The process of gathering quotes is tedious, but it pays off if you find a better value policy.
Tenant insurance isn’t mandatory, but some landlords may require it. When renters become owners, you’ll need home insurance to get a mortgage. Condo insurance isn’t a lot more than tenant insurance, but the cost of insuring a house can run easily run you $1,500 per year.
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Rob’s personal finance reading list
Sun screen is hot stuff
CNN reports on booming sales of sun screen. It’s a story of people reacting to climate change, and also clever marketing that gets people to spend more.
When you make less than your partner
Advice on how to protect your finances if you’re the lower-income partner in a relationship. “There are too many stories of women who weren’t raised to be financially literate, are oppressed by the patriarchy, or are in abusive relationships.”
The most fuel efficient EVs and gas-powered vehicles
A key cost of owning any type of vehicle is the amount spent on fuel, either electricity or gasoline. Here are the five EVs and gas-powered vehicles with the most cost per 100 kilometres driven.
How good is your credit score?
Guidelines on interpreting your credit score, and suggestions on how to improve it.
Ask Rob
Q: Can you explain the pros and cons of purchasing an annuity for retirees with the current high interest rates. Fred Vettese argues for them in his book, Retirement Income for Life.
A: Here’s the column I just wrote on annuities.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
The Canadian Bankers Association warns about the latest text phishing scam, aimed at stealing your money or personal information.
The money-free zone
Patti Smith, with an assist from her cat, sings Dancing Barefoot. Backing on guitar by her old collaborator Lenny Kaye.
From the Twitterverse
Gifts are “the lowest form of love.” That nugget comes from a Twitter thread in which people were asked for the most unusual financial arrangement they have made with a spouse.
We want to hear from you
Have you sought gender affirming care that isn’t covered by provincial healthcare? Examples include facial feminization and masculinization surgeries, voice pitch surgery, electrolysis and or laser hair removal. If you or your child has had to pay out of pocket for a procedure like this, please reach out to journalist Kelsey Rolfe, at kannerolfe@gmail.com. She’s working on a story that looks at this topic for the Globe.
ICYMI
- This grocery calculator will help you spot ways to squeeze inflation out of your food bill
- Renting your property as a new homeowner can jeopardize thousands of dollars in tax benefits
- The curious incident of the shrinking Gatorade in the nighttime of high inflation
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be child-free or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada’s top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer’s guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
Rob Carrick