Renters vs. Homeowners Insurance: What's The Difference?

All people need financial protection to guard against property damage, loss of personal items, and legal liability, whether they own or rent their homes. Homeowners insurance and renters insurance provide such protection, but it is important to know the difference between the two.

What is the Difference between Renters and Homeowners Insurance?

Homeowner’s insurance covers financial losses related to the outside structure of the home and personal belongings inside the home. One thing both types of policies have in common is that they require regular payments, and the policy must be current on payments when you make a claim. Here are the major differences between homeowners vs. renters insurance:

  • Homeowners insurance never covers losses by renters. If you earn some or all of your income from rental property, your homeowners insurance policy covers damage or loss to the building itself and your personal property. The people you rent to need to have separate renter’s insurance policies to cover their personal losses.

  • Renter’s insurance costs substantially less than homeowners insurance because it covers less. While homeowners insurance includes a dwelling policy, renter’s insurance does not offer this coverage. Another reason that homeowners insurance costs more is that it covers more square feet of property and the physical structure itself. The property is more vulnerable to damage, particularly if it is a stand-alone structure.

Types of Damage Covered by Homeowner’s Insurance

The typical homeowners insurance policy from Arnold Insurance Company offers coverage for the following types of damage:

  • Fallen trees or other fallen objects
  • Fire
  • Hail
  • Heavy winds
  • Lightening
  • Rioting
  • Theft
  • Vehicle damage
  • Water damage

What Are the Benefits of Homeowner’s Insurance?

Most mortgage lenders make it a condition of approval that the borrower must obtain homeowners insurance. You do not have the same obligation if you own your home free and clear, but not having a policy in place makes you extremely vulnerable to losses that you cannot always control or predict.

The most important benefit you receive from homeowners insurance is peace of mind. When you work with our team at Arnold, you benefit from years of experience and the personal concern that each agent has for their clients. We will present you with a variety of customized coverage options. However, we always recommend that clients take out a policy that covers the total cost to rebuild their home and replace the value of damaged or destroyed items inside the home.

Should I Purchase Renter’s Insurance?

As a renter, you do not have the responsibility to insure the dwelling where you live because someone else owns it. You still want to protect your personal belongings inside your apartment or rented room since the person or company you rent from is not responsible for replacing them if lost, stolen, or damaged. Most rental companies require that tenants obtain renter’s insurance to fulfill their lease obligations.

Renter’s insurance also provides you with protection from legal liability if a visitor sustains injury inside the dwelling you rent. For example, you would face legal liability if your visitor broke a leg by tripping over your cat, but not if they broke a leg falling down the stairs. The latter would require a claim against the homeowner’s insurance company of the person or company that owns the entire building.

Arnold Insurance Offers Protection No Matter Where You Reside

Whether you own or rent your home, we are here to make sure you remain safe and protected. Please contact your closest Arnold Insurance office today to request more information or visit us online to learn more about homeowner’s and renter’s insurance options.


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