If you rent a home, do you need renters insurance and homeowners insurance or just one or the other? What’s the difference between these coverages?
These are just a few of the questions we’re regularly asked about renters insurance and homeowners insurance. In today’s post, we intend to give you answers to these questions and many more on the topic!
Renters Insurance vs. Homeowners Insurance: What’s the Difference?
The easiest way to understand the difference between renters insurance and homeowners insurance is to look at their names and take them quite literally: renters insurance is for those who rent their homes, while homeowners is insurance for the homeowner.
Renters insurance offers coverage for the personal belongings inside of the rented home, rather than for the physical structure of the home. Why? Well, whoever owns the property is the one responsible for insuring its structure.
When to buy renters insurance
If you rent a home and you have personal property, renters insurance is likely a good choice. In the event your property is stolen or damaged, your insurance could cover the cost of repairing, replacing, or reimbursing you for the insured property. When you rent a property, many landlords will require the renter to purchase this coverage before they’ll sign the agreement.
When to buy home insurance
While a regular home insurance policy will include personal property coverage, homeowners insurance includes other forms of coverage a renters insurance policy does not have.
If you get a mortgage for your home, the lender will often require that you have home insurance in place. If you don’t use a mortgage to purchase your home, home insurance is generally considered optional, although strongly encouraged. Without home insurance, you’d be responsible for replacing or repairing stolen or damaged personal property, covering the cost of repairing or replacing the structure of your own home, and many other things home insurance covers.
As you can see, home insurance and renters insurance are different types of coverage, but the coverage they both offer is critical nonetheless!