What’s the Difference Between Renters Insurance and Homeowners’ Insurance?

It does not matter if you rent or own your home, the property and its contents should be protected with insurance. If the home is a rental, typically the owner of the home would ensure his property, while the renter is responsible for insuring the contents of the home. On the other hand, for those who own their homes, homeowners’ insurance can protect their home and their contents. Although, both renters and homeowners require regular payments that can range anywhere from monthly payments to one lump sum annual payment. To pay out a claim, the policy must be in good standing position. Meaning, you should be pay your insurance on time to avoid any inconvenience.

Normally, a homeowners’ insurance policy is taken out by the owner of the home. A property owner is not “duty-bound” to insure his or her property unless there are exceptional circumstances, but a homeowner who has a mortgage is enforced to take out an insurance policy. The average homeowners’ insurance coverage will generally cover the cost to replace the home in the event of any unforeseen loss to the home. Additional insurance can be separately added to cover the restoration value of the items in the home.

On the other hand, renters insurance is for residents who do not own the property but who are eager to preserve their personal belongings on their property. It is essential for renters to understand that the property owner’s insurance policy does not cover them if their items are lost in an event and they were damaged or destroyed. Renters insurance policies normally reimburse a renter for the replacement cost of property that is lost or damaged while on the property. Since you are renting the property from someone else, you are not insuring the property itself; only your personal property. So, let’s say in an event your personal property does get lost or damaged, the policy would cover your monetary losses after your deductible. A deductible is a monetary amount that one has to pay before their insurance will indemnify any of the losses. One should keep an up-to-date inventory of their personal property which, in turn, will help to recover the costs of any loss or damage to the property.