Whether you own a home or rent one, you must have insurance coverage. When you hear about homeowner insurance and renter’s insurance, they seem like interchangeable terms. Well, they might seem like the same terms but they are not. Wondering Homeowners Insurance vs. Renter’s Insurance: What’s the Difference? Let’s find out.
What is Home Insurance?
It is an insurance policy that provides coverage for the actual building you live in, its associated structure, and your personal belongings in it. A person who owns the home needs to protect his building and belongings through home insurance. Home insurance is required by the lender when you opt for a mortgage.
What is Renter’s Insurance?
Renter’s insurance is an insurance policy that provides coverage for your personal belongings in a rental home. In case of your personal property damage or theft, you can file an insurance claim and get the money from an insurance company. Your insurance coverage does not apply to the building, which is usually covered by your landlord’s insurance. In other words, your landlord will sign up for property insurance that will cover the building and its associated structure. Landlord insurance won’t cover your personal belongings.
Example:
Let’s say your garage gets damaged by accident, and you own the home then the insurance company will pay for garage repair. Now if the same accident happens to a rental home, then the renter’s insurance won’t cover repair expenses. Instead, the landlord’s insurance company will pay for all repair expenses.
Homeowners Insurance vs. Renter’s Insurance: What’s the Difference?
Here are some points of difference between both insurance types:
Dwelling Coverage
It’s another point of difference between renter’s insurance and homeowners insurance.
Homeowner insurance provides coverage for dwelling. For example, it will protect the home’s building and its associated structures like a shed, and garage.
In the case of renter’s insurance, no building or structure gets coverage.
Necessity
When you sign up for a mortgage agreement, then its home insurance is a requisite. The lender will require a homeowner to get this insurance. On the other hand, renter’s insurance isn’t a must. Although most landlords ask tenants to get renter’s insurance, if you don’t have very expensive belongings to protect, you can skip that insurance.
Cost
Homeowners insurance cost is higher than renter’s insurance. Why? It’s because a renter’s insurance protects only the personal belongings of a tenant. On the other side, homeowner insurance is a comprehensive package that offers coverage for both the building and personal property of a homeowner.
Homeowners Insurance vs. Renter’s Insurance: What’s the Similarities?
Although both kinds of insurance are different they have some similarities. Let’s find out more about them:
Personal Property Coverage
Both types of insurance provide personal property coverage but there is a difference in specific. In the case of homeowners insurance, all the personal properties inside or outside the home are covered. But when you go with renter’s insurance, then it offers limited coverage to all personal belongings only inside the rental space.
Liability Coverage
In case you and your family are responsible for any property damage or personal injury on your property then you get liability coverage in both kinds of insurance. This coverage will help you pay medical fees or legal expenses in case of any unfortunate incident.
Additional living expenses
Sometimes, your home or rental space becomes inhabitable ( due to some accident like fire, etc) In that case, both insurance types offer coverage for additional living expenses such as hotel fees, meal charges, service costs, etc.
Final Words- Difference between Homeowners Insurance vs. Renter’s Insurance
You can easily differentiate between both types of insurance by asking yourself two questions.
Who needs it?
Well, homeowners need homeowners insurance while tenants require renter’s insurance.
What does it cover?
Homeowner’s insurance safeguards property & belongings inside and out. Renter’s insurance covers belongings within the rental space, often at a lower cost. Contact Matrix-Insurance at (706) 310-0000 to secure your coverage today!