The Differences Between Homeowner’s and Renter’s Insurance


While these policies are similar, they’re not exactly the same. Whether you’re renting or buying for the first time, you’ll want to know exactly what’s included—and what isn’t.

Whether you’re a renter or a homeowner, you either have insurance for your property or you’ve considered it. And while there are similarities to these two different types of policies, understanding what each type covers and what your situation dictates is important. Here’s a guide on the difference between homeowner’s and renter’s Insurance:
  1. Homeowner’s is required if you have a mortgage
When you purchase a home and finance the loan through a lender, you’ll be required to have a minimal amount of homeowner’s insurance. This is done so that if the property is destroyed or damaged by some unforeseen event, like a fire, you’ll be covered and so will your lender. But most folks choose to get comprehensive policies that will include much more coverage including liability as well as the house and any other structures on the property.
  1. Renter’s Insurance is not required, just recommended
As a renter, you generally have the choice to buy insurance, though some communities will require a minimum amount of coverage. The benefits of having renter’s insurance are plenty, because your landlord’s homeowner’s policy usually will not cover your belongings. Renter’s insurance will cover things like your furnishings, jewelry, TVs, computers, stereos and other items. And while you may be thinking that your stuff is not that valuable, consider how much it would cost to replace those items in today’s market. Renter’s insurance will replace your belongings if they’re lost, stolen or damaged and even cover items that get stolen or lost from your car.
  1. There’s a big difference in cost
Renter’s insurance is much less expensive than homeowner’s insurance. This makes sense since when you purchasing renter’s insurance you’re only covering your belongings and not the entire house. While renter’s policies average about $16 a month, homeowner’s policies are usually several thousands of dollars a year, and premiums are determined by things like location, the age of the house and the roof, whether or not you have things like storm shutters (if you’re in Florida) and other factors. The value of the house is also taken into consideration.
  1. What’s excluded
Both renter’s and homeowner’s insurance policies will have exclusions—things and circumstances that are just not covered. Be sure to review your policy before you purchase it. While both types of policies may include personal liability to cover things like injuries of persons visiting your home, things like damage from floods is usually not included (unless the flood was caused by a plumbing disaster).
If you own a home or are renting one, having insurance is highly recommended. For a renter, it gives you the opportunity to make sure that if anything does happen, you’ll be able to replace the belongings that were damaged or destroyed. And for homeowner’s, having comprehensive coverage gives you the peace of mind that your property and your liability is protected. For more information on either type of policy, contact Avante Insurance to discuss your options in more depth.