Do I have to buy tenant insurance in Prince Edward Island?

Landlords can require tenant insurance as part of your lease, but it isn't mandated by law. Insurance protects you against unexpected costs due to liability.

What if I disagree with my landlord about a liability claim?

Document the situation, gather evidence, and apply for a dispute resolution hearing with IRAC if needed.

Can my landlord take my security deposit for liability claims?

Yes—if you cause damage or fail to pay for repairs, your landlord may deduct the amount from your security deposit, subject to provincial rules.

Does tenant liability cover roommates and visitors?

Most tenant insurance covers the policyholder, household members, and guests, but check your policy details.

Who pays if a pipe bursts and causes damage?

If the damage is not your fault, the landlord’s building insurance should cover repairs. If tenant negligence caused the incident, you may be responsible.

Tenant Liability Claims Explained for Prince Edward Island

Tenant Insurance & Liability Prince Edward Island published: June 19, 2025

When renting a home or apartment in Prince Edward Island, understanding how tenant liability claims work can help protect both you and your landlord if unexpected damage or accidents occur. This guide explains your legal responsibilities under provincial law, the claims process, and important steps to take if a liability situation arises during your tenancy.

What Is Tenant Liability?

Tenant liability refers to your legal responsibility if you, your guests, or even a pet unintentionally cause damage to your rental unit or harm others while living there. Common examples include water damage from overflowing a bathtub, accidental fires, or injuries to visitors on the property.

Prince Edward Island Law: Liability and Rental Agreements

In Prince Edward Island, tenant and landlord rights and responsibilities are laid out in the Rental of Residential Property Act ^[1]. Tenants must keep the rental in reasonable condition, report any damage, and avoid behaviour that could harm the property or others. Landlords handle structural repairs and insurance for the building itself, but tenants are usually responsible for personal contents and liability.

To see a full overview of PEI rental law, visit Tenant Rights and Landlord Rights in Prince Edward Island.

Do Tenants Need Insurance?

Although the law doesn't require tenant insurance, most landlords on PEI strongly recommend (or even require) that tenants purchase renter’s or tenant liability insurance as part of their lease agreements. This type of policy covers accidental damage you might cause, as well as liability for injuries that occur in your home.

Typical Liability Claim Scenarios

Accidentally starting a fire when cooking
Causing water damage (e.g., leaving a faucet running)
A guest slipping and getting hurt in your unit
Damage to common areas caused by you or your visitors

How Are Tenant Liability Claims Handled in PEI?

If you cause damage or someone is injured in your rental, here's what typically happens:

Landlord notification: Your landlord will notify you of the damage and seek compensation for repairs or losses.
Insurance claim: If you have tenant insurance, contact your provider immediately. They will assess the claim and communicate with your landlord as needed.
Direct payment: Without insurance, you may need to cover the costs yourself. Unpaid damage could be deducted from your security deposit or lead to a legal claim against you.

Sometimes, liability issues arise after moving out. For a smooth rental exit and deposit return, see Moving Out Tips: A Tenant's Guide to a Smooth Rental Exit.

What Forms or Evidence Are Needed?

Move-In/Move-Out Inspection Reports: These forms, available from the Island Regulatory and Appeals Commission (IRAC), are completed at the start and end of your tenancy. They record the property's baseline condition.
Damage Claim Form: (No specific number). If a dispute over liability arises, landlords can file an Application for a Hearing with IRAC. This starts the official resolution process.

Example: If your actions cause major damage and you disagree with the landlord about responsibility or repair costs, either party can apply for a hearing using the IRAC form linked above. Both sides can present evidence, like inspection reports or receipts, at the hearing.

Who Decides Disputes?

The Island Regulatory and Appeals Commission (IRAC) handles residential tenancy disputes on PEI. They can review evidence and make legally binding decisions on damage, liability, and compensation.

Always document any damage, keep receipts, and report problems to your landlord in writing. Quick action keeps liability claims clear and fair for both parties.

Tips to Reduce Liability Risk

Purchase a tenant insurance policy with liability coverage.
Carefully document the rental condition at move-in and move-out—see the Guide to the Initial Rental Property Inspection for Tenants.
Report repairs and safety hazards in writing to your landlord.
Practice good safety and housekeeping.

For a map-based, easy search when looking for your next place, Search Canadian rentals with interactive map view and compare options across PEI and beyond.

FAQs: Tenant Liability Claims on Prince Edward Island

Do I have to buy tenant insurance in Prince Edward Island? Landlords can require tenant insurance as part of your lease, but it isn't mandated by law. Insurance protects you against unexpected costs due to liability.
What if I disagree with my landlord about a liability claim? Document the situation, gather evidence, and apply for a dispute resolution hearing with IRAC if needed.
Can my landlord take my security deposit for liability claims? Yes—if you cause damage or fail to pay for repairs, your landlord may deduct the amount from your security deposit, subject to provincial rules.
Does tenant liability cover roommates and visitors? Most tenant insurance covers the policyholder, household members, and guests, but check your policy details.
Who pays if a pipe bursts and causes damage? If the damage is not your fault, the landlord’s building insurance should cover repairs. If tenant negligence caused the incident, you may be responsible.

Key Takeaways

Tenant liability means being financially responsible for damage or injury caused by you, your guests, or pets.
Tenant insurance is strongly recommended to protect against claims.
Document everything and act quickly if a liability issue arises.

Understanding your rights and duties helps prevent costly misunderstandings.

Need Help? Resources for Tenants

Island Regulatory and Appeals Commission (IRAC) Rental Office – Applications, dispute forms, and information.
PEI Rental of Residential Property Act
Tenant advocacy: PEI Housing Services
For a full overview: Tenant Rights and Landlord Rights in Prince Edward Island

[1] PEI Rental of Residential Property Act (official text)
Island Regulatory and Appeals Commission tenancy info: https://www.irac.pe.ca/rental/