Homeowners Insurance vs Renters Insurance: What Are the Differences?
It’s finally happening — you’re ridding yourself of being a renter for your current apartment and are purchasing a home of your very own. These are big times, indeed!
You’re probably already thinking about things such as how you’re going to renovate the home, the furniture you’re going to buy, the purpose for each room, etc.
However, there are other details such as investing in homeowners’ insurance that you now need to focus on as well.
You might be thinking to yourself “what’s the difference between homeowners’ insurance and renters’ insurance?”. Glad you asked! Here are a few details on the major differences.
Perhaps you’ve never known the difference of what separates renters’ insurance from homeowners’ insurance. You just purchased it because it was a requirement and/or was included in your monthly rent.
If that’s the case, then you did yourself a favor. Not having it could lead to an extreme personal loss in the case of an emergency where your items are damaged.
Here are the main differences between renters insurance, as oppose to homeowners’ insurance.
It’s For Those That Don’t Own the Property
As the name of the insurance policy would suggest, renters insurance is exactly that — insurance for someone renting the policy.
This insurance helps lessen the stress between the landlord/owner and tenant. It creates a definitive line of who’s responsible for what.
In other words, renters have an option to cover their items that get destroyed in an event such as a fire in the apartment. Even if the tenant chose not to invest in renters’ insurance, the owner isn’t held responsible for the tenant’s items.
Protects the Renter’s Belongings
Because the property you’re renting isn’t your own, you’re not on the hook for any damage to the property during an emergency.
However, you’ll still want to make sure the items in your possession are protected if that were to happen. If renters’ insurance didn’t exist, you’d have no way to get reimbursed for your loss.
Just because you don’t own the property doesn’t mean you can undergo loss. This option gives you protection from those scenarios in your time of need.
Does not Include Dwelling Coverage
Renter’s insurance and homeowners’ insurance are alike in almost every category except one — the dwelling coverage. There’s no need for it to be covered as a renter since you have no entitlement to the home’s structure.
However, the homeowners’ insurance that your landlord has protects you both and them from being on the hook for those expenses.
Maybe you’re looking to purchase a home relatively soon or are in the final stages of closing on one. If so, congratulations! You’ll want to invest in homeowners’ insurance right away. But it’s just as important to know the details before doing so.
Here’s a guide to the main benefits of having homeowners’ insurance and how they differ from renters’ insurance.
It Covers All the Necessities
Not many people realize that homeowners’ and renters’ insurance has five main coverage types to consider: dwelling, personal liability, additional living expenses, medical payments, and personal property.
While renters’ insurance only covers four of the five (all except dwelling), homeowners’ insurance covers all of them.
As a homeowner, you may experience an emergency setback, or “peril”, and will need reimbursement for your losses. Homeowners’ insurance has you covered!
Make sure that the homeowners’ insurance that you invest in has all of these coverage types included in it. Some companies may try to cheat you out of a few, so make sure the insurance company you work with has your back.
Insures the Proper Amount
Sometimes homeowners’ insurance saves the homeowner from their own ignorance of what needs to be protected.
You may think that since your home is $200,000, you only need insurance worth that same amount of coverage, right? Wrong! You also need to consider the $100,000 worth of property inside the house that you own.
So, realistically, you need $300,000 worth of coverage to protect and reimburse everything you could possibly lose during a peril.
It Includes Dwelling Coverage
As previously mentioned, dwelling coverage (AKA Coverage A) is only included in homeowners’ insurance. But what does that mean?
Simply put, dwelling coverage is the portion of the insurance that covers the cost to rebuild or repair your home’s structure after an incident of peril.
Then all you’ll need to do is list out the repairs you need to make, what that cost looks like, and your insurance company will reimburse you for those expenses.
Most Perils Are Insured
Most homeowners’ insurance policies covered the same perils, but it’s important that you double-check before investing.
These perils include things like fire, lightning, theft, hail, vandalism, wind storms, falling trees, smoke damage, etc.
Losses and personal injury will probably be detrimental enough without factoring in the financial damage. Thankfully, that’s a problem you won’t have to deal with for long.
From Renter to Homeowner: Find the Right Insurance for Your Situation
Whether you’re a renter or a homeowner, be sure and find the right insurance policy for your needs.
Why spend any more money on insurance than you have to? What if you can get the same amount of coverage at a lower rate for yourself?
Be sure to read this in-depth article on why all tenants need renters’ insurance. It doesn’t matter if you’re the tenant or the landlord, there’s valuable information to learn!
Save up to 38% online. Get a FREE quote now!
Bridgeview, IL 60455
Monday: 9:00 am – 5:00 pm
Tuesday: 9:00 am – 5:00 pm
Wed.: 9:00 am – 5:00 pm
Thursday: 9:00 am – 5:00 pm
Friday: 9:00 am – 5:00 pm
Saturday: 10:00 am – 3:00 pm