Rental vs. Homeowners Insurance

Whether you own your home or rent it, rental/homeowners insurance is typically a necessary cost of living. While rental insurance and homeowners insurance have many similarities, there are different types of coverage as well. It is important to choose the right kind of insurance for your needs.

Similarities in Rental and Homeowner Insurance

Both rental and homeowner insurance provide protection for you and your property. Both insurances are designed to help you replace lost personal property as a result of fire or water damage and vandalism and theft. In addition, both rental and homeowner insurance can provide you with liability protection in case someone is injured while at your home. However, if someone is injured while at your rental property, the landlord may be liable regardless of the cause of the injury.

Differences in Rental and Homeowner Coverage

The biggest difference between rental and homeowner insurance is the dwelling coverage. When you own the home, you need insurance to cover the cost of replacing your home if it is lost in a fire, repairing the home if it is damaged by vandalism, fire, or water, and protecting you from other structural concerns (like a tree falling on the roof and caving it in).

When you are a renter, you need to insure yourself against damage you might cause to the structure. For example, if you have a waterbed and it breaks and damages the flooring, your insurance could cover that if it is included in your policy. However, if there was massive rain that caused flooding, your landlord's insurance policy would cover the damage. It would not be your responsibility.

Your renter's policy should focus more on replacing your personal property that might be stolen, damaged, or lost in a fire or flood. Your landlord's policy is responsible for injuries that happen on the premises and damage to the property itself.

Choosing Your Policy

If you are a renter, it might seem like obtaining renter's insurance is a waste of time, but it only takes one experience without insurance to convince you otherwise. Your renter's policy can protect you in case the place you are renting is made unlivable, providing coverage for you to move or stay in a hotel during repairs. It protects you from losing your property if it is damaged or stolen. Most of all, it provides very low cost peace of mind that the accumulation of property you have worked so hard to build won't go up in smoke if your apartment or rented house does.

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