Renters insurance vs. homeowners insurance

You likely already know that renters insurance protects tenants and homeowners insurance safeguards homeowners and their property. And if you’ve started shopping for renters insurance, you may also already know how affordable a renters policy can be. If you’re looking into homeowners insurance for the first time, you’ll notice that the cost of homeowners insurance may be more expensive than renters insurance. This is because a homeowners policy protects your home’s structure and will typically offer more coverage than a renters policy.

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Renters insurance vs. homeowners insurance cost

Renters insurance is generally inexpensive, but the actual price of your policy will depend on several factors, including the state in which you live, type of residence, credit score and coverage limits.

Home insurance will typically cost you more than a renters policy. Like renters insurance, a variety of components determine your policy price, such as your location, type of home, construction of your home’s roof, prior claims, and coverage selections.

Learn more about how much renters insurance costs and the average cost of homeowners insurance.

What’s the difference between renters and homeowners insurance?

The main and most obvious distinction between renters insurance and homeowners insurance is that a homeowners policy safeguards the home’s physical structure against covered perils while renters insurance won’t protect the home or building occupied by the tenant. Dwelling coverage on a homeowners policy may pay to repair or rebuild a home after damage due to a covered peril. Renters policies typically don’t contain dwelling coverage. If an apartment building or rental house is damaged by a covered peril, the building owner or homeowner is responsible for having insurance on the structure, not the tenant.

While both renters policies and homeowners policies offer personal property coverage in order to protect your belongings, coverage limits are determined differently. Renters insurance policyholders are usually able to set their own limit based on the value of their belongings. For homeowners policies, personal property coverage is often calculated by using a percentage of the policyholder’s dwelling coverage limit.

Learn more about how much home insurance is needed.

Loss of use coverage also appears on both renters and homeowners policies, but the coverage limits can vary. Homeowners policies typically offer 10% or 20% of the policy’s dwelling coverage amount for loss of use coverage. However, depending on the insurer, the loss of use coverage limit on a renters policy may be a flat amount between $3,000 and $5,000 or could be a percentage of the personal property coverage limit.

Neither homeowners or renters insurance is required by state law. However, homeowners insurance is normally mandated by the lender if there is a mortgage attached to the property. Renters insurance may be required by a rental company or landlord before a tenant can occupy an apartment unit or rental house.

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Please note: The above is meant as general information to help you understand the different aspects of insurance. Read our editorial standards for Answers content. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provisions, limitations, or exclusions expressly stated in any insurance policy. Descriptions of all coverages and other features are necessarily brief; in order to fully understand the coverages and other features of a specific insurance policy, we encourage you to read the applicable policy and/or speak to an insurance representative. Coverages and other features vary between insurers, vary by state, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. References to average or typical premiums, amounts of losses, deductibles, costs of coverages/repair, etc., are illustrative and may not apply to your situation. We are not responsible for the content of any third-party sites linked from this page.