Do you know the difference between homeowners insurance and renters insurance? Our quick look chart helps you compare them side by side.
Whether you rent or own your home, it’s important to have insurance to protect your property. However, studies indicate significant variations in the number of renters and homeowners who have insurance. Only 41 percent of renters have renter’s insurance, compared to 95 percent of homeowners who have home insurance.
Although both types of insurance can provide coverage for property damage, liability, medical payments to others, and additional living expenses (ALE), there are some notable differences between the two policies.
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In the chart below, we outline the key differences between homeowners and renters insurance, the types of coverage each offers, and why they’re essential to protect. your home whether you own or rent.
Side-by-side comparison of how homeowner’s insurance differs from renter’s insurance
| Homeowner’s Insurance | Renter’s Insurance | |
| Who it covers | People who own their homes | Tenants rent their house |
| What it includes | Physical building structure (e.g. home, garage, warehouse, etc. Personal belongings (e.g. furniture, TV, clothes, etc.) Legal responsibility Medical payments for others Additional living expenses | Personal belongings (e.g. furniture, TV, clothes, etc.) Legal responsibility Medical payments for others Additional living expenses |
| The reason why you need it | Lenders often require if/when you apply for a mortgage | Many homeowners claim it when you sign a lease as their policy only pays to repair the structure (and Are not replace your things) if damage occurs |
| How it covers you | Pay to repair or rebuild your home and/or replace your personal belongings (e.g. furniture) after a fire, theft, vandalism, fallen tree or bad weather, such as lightning, wind or hail, causes damage harmful. Provide insurance if your things are stolen from your property. Pay extra for living expenses if your home becomes uninhabitable when it is damaged (due to hazards listed in your policy) and you have to spend money on a temporary place to live (eg. : hotel) while it was being repaired. Pay legal fees if you get sued about an incident on your property. Help pay someone’s medical bills if they cause damage to your property and you are liable. Also helps pay to repair damage you inadvertently cause to someone else’s property. | Pay to replace your things damaged by fire, smoke, lightning, storm, theft, explosion, faulty plumbing, or any other disaster listed in the policy. Provide insurance if your apartment, car or warehouse is broken into and your belongings are stolen. Pay for extra living expenses if your rent becomes uninhabitable when it breaks down (due to a hazard listed on your policy) and you have to spend money on a temporary place to stay (e.g. hotel) while it is being repaired. Pay legal fees if you get sued about an incident in your rental room. Help pay for visitors’ medical bills if they are injured during your tenancy and you are legally responsible. Also helps pay to repair damage you inadvertently cause to someone else’s property. |
| What Insurance Levels You Should Consider | Actual cash value insurance reimburse you for the cost of the item(s) at the time of loss, minus your depreciation and deductibles. orValue of replacement cost will refund the full value of the purchase of a new item. or Extended replacement cost/value pay any costs to repair or rebuild your home—even if it exceeds your contract limit. | Actual cash value insurance reimburse you for the cost of the item(s) at the time of loss, minus your depreciation and deductions. or Value of replacement cost will refund the full value of the purchase of a new item. |
| Available forms | HO-1: Narrow coverage; not in most states HO-2: Expanded to include water damage from plumbing and falling objects HO-5: Covers nearly all damages unless excluded HO-8: Includes older, historic houses | HO-4 only one |
| What you will pay for… Average cost per year General deduction(s) | $1,272-$2,000 | $1,74$ |
