The Difference Between Renters and Homeowners Insurance

It’s official. You bought a house! You move in soon and now you have a lot to think about. What color to paint the kitchen? What should the bathroom theme be? You also have some less-fun decisions to make like, how to divide the mortgage up over the next thirty years, and what insurance policy is best for you and your home. Keep reading to discover how homeowners insurance is different from renters insurance.

The Similarities

It’s also good to understand the similarities and what each insurance covers first. Renters and homeowners insurance are very similar, and they cover a lot of the same things. Personal property coverage – this is when your personal belongings are damaged in any way. There is also personal liability coverage. Policy Genius explains that, “Personal liability coverage protects you if someone sues you for damages to their property or themselves in any unintentional, non-car related incident inside or outside your home...”. They also both cover medical bills for other people, and  yourself if you get hurt on your own property.

The Differences

It’s pretty simple really. Renters insurance covers someone when they are renting a place, and homeowners insurance is for when someone owns their own home. The difference is the land and structure. As a renter, you do not personally own the building – your landlord does. Renters insurance covers anything that could happen to your person or belongings – not the building. Homeowners insurance does both. It covers you as a person, but it also covers the structure and land.

Cost

There is in fact a difference between the cost of homeowners and renters insurance. Renters insurance can cost as little as $20 a month, depending on where you live, and how big your apartment is. Homeowners insurance, however, is understandably, much more expensive. It covers the land, house itself, and all the personal belongings. If any damage were to happen to a home it would cost an insurance company a significant amount more than if any damage were to happen to a renter.
 
How to Buy

It is much easier to buy renters insurance than homeowners insurance. To buy renters insurance you need your address and an idea of how much all your belongings cost. It takes a little more information to buy homeowners insurance. You need to determine the replacement value of your home – but don’t worry you can get the professionals to figure that out. You also need to figure out the value of everything else in your house. Also, having all the history and information for your house to take to an insurance agency will make it easier for them to determine your quote. This would be like: what year was your house built, what type of heating does it have, do you have a pool? Every situation is different, so depending on how much property you have, how much your belongings cost factors in to how much your insurance will be.  

Whether you are switching from renters to homeowners or from homeowners to renters you need to know the differences, and what changes when you switch. Knowing the difference can be a money saving tool.

From all of us here at Deiblr, Straub & Toutman, we hope you have a wonderful April, and don't forget to reach out with any questions you may have!