The Difference Between Renter’s Insurance and Homeowner’s Insurance

Feb 27, 2019

You need a different kind of insurance policy to protect yourself if you own your home instead of renting it, but what is the real difference between homeowner’s and renter’s insurance policies? Here’s a quick rundown outlining the differences.

What’s Covered

With a homeowner’s insurance policy, the house itself, any outbuildings or other structures on the property and your belongings are generally covered. Pretty much everything on the property is covered at replacement cost.

With a renter’s insurance policy, the tenant’s belongings are the only thing covered. The items are covered in cases of damage or theft.


Renter’s insurance is usually much more affordable than homeowner’s insurance. Renter’s policies start at just over $10 per month. They’re usually a very small expense. Homeowner’s policies are usually much more expensive. You can expect to pay more than $1,000 a year for insurance as a homeowner.

The deductibles are also generally less expensive for renter’s insurance claims. That means that if you wind up needing to use your insurance policy, it’ll be less expensive as a renter than a homeowner.

Barriers to Getting a Policy

With a homeowner’s policy and renter’s policy alike, there may be some barriers to getting a policy. Most of these reasons are the same.

Some locations may be prone to natural disasters like flooding and that can make it difficult to get just any homeowner’s policy. Properties in high crime areas may make insurance companies leery, as well. Applicants may also be denied a policy due to poor credit history. A home in poor repair or a very old home may be difficult to insure. Even the type of dog you own may act as a barrier to getting homeowner’s insurance.

Renters may be declined a policy if the home is too far from emergency services or the property is deemed risky for some reason. Denials occur due to credit issues, as well.

Required or Not?

If you have a mortgage, you can pretty much guarantee that you’ll be required to purchase and maintain a homeowner’s insurance policy. Lenders require this to protect their investment in your home. However, if you own your home outright, you aren’t required to have an insurance policy on your home (though it’s generally accepted as a common-sense expense in order to protect your investment).

Not all landlords require that their tenants get a renter’s insurance policy. However, it is becoming more and more common that do. This keeps tenants from trying to make landlord’s liable for damage to their possessions due to problems with the structure itself. For instance, if a tree breaks the roof and the tenant’s things are ruined because of it, both landlord and tenant can rest easy knowing that the renter’s policy will handle the bill for the damaged items.

In Conclusion

The point of insurance policies to protect your belongings is essentially the same. It’s to make sure that you don’t bear the financial burden of a disaster, whether it’s natural or man-made. However, one is a little more straightforward than the other.