top of page

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

Time to make the jump from renting to owning? Here's what you should know about how that effects your insurance.

Let’s say you’ve rented your place for a few years, and now you’re looking to buy your own home. You may be familiar with renters insurance, but soon you’ll need a different type of policy to keep you covered. Here's what you should know.

Homeowners insurance vs. renters insurance

Put plain and simple, renters insurance is for renters, and homeowners/condo insurance are for policyholders who own their homes. Not surprisingly, you’ll pay a bit more to insure a place you own than you would pay to insure a comparable property that you are only renting.

What does renters insurance cover?

If you rent, damage to your building itself is part of your landlord’s insurance policy, not your renters coverage. Renters insurance coverage includes everything that homeowners insurance covers, except for damage to the rental property itself since you don’t own it. Instead, property damage coverage is part of your landlord’s insurance policy.

Renters insurance covers things like:

  • Loss or damage due to certain causes like fire, theft, or even vandalism

  • Temporary living expenses if the covered loss is so bad your home’s not livable

  • Personal liability & medical bills for instances in which someone gets hurt at your place in an accident—whether that means hospital bills or legal fees from a lawsuit. It also extends to certain damages that you may cause when you’re away from your home.

It’s also important to note that your renters insurance policy covers your belongings against theft anywhere in the world. So whether you’re at home, traveling, or visiting your favorite restaurant, you're covered.

You should also read your insurance quote carefully to look for exclusions. These are things that are not covered by your policy. It won’t include damage to the personal property of other people who live in your rented home so your roommates each need their own renters insurance policy.

What does homeowners insurance cover?

A typical homeowners policy covers a lot, like damage to your home and your personal property, personal liability, living expenses, and even medical fees.

But just like with renters insurance you’ll still need to check your policy for exclusions. Some common things that you wouldn’t be covered for include:

  • Flooding and some other types of water damage

  • Anything that you could have fixed before it reached the point of causing damage

  • Natural disasters

You can buy individual insurance policies to cover any gaps in your insurance, like flood insurance or earthquake insurance.

How much renters or homeowners insurance coverage do I need?

“How much coverage do I need?” is a tricky question, and one whose answer depends on your personal situation, as well as your tolerance for risk.

As a baseline, homeowners insurance needs to cover the amount it would cost to totally rebuild your home. For renters insurance, it’s entirely up to you but the coverage you choose should be aligned with the value of the stuff you own.

Here are some things to consider:

  • How much would it cost to replace your household appliances, furniture, and clothing?

  • How much money might you need, beyond your normal daily expenses, if you can’t live at home for a week or two?

  • Which are your most beloved possessions, and how much would it cost to replace them?

  • How much might it cost if your kitchen is out of commission for a couple of weeks and you have to rely on takeout meals?

When it comes to deciding how much insurance to pay for, the main thing to think about is how much your peace of mind is worth. It’s often worth paying a little more to know that you have enough insurance to cope with (almost) anything that comes your way.

And if you need help deciding and want to discuss your options, reach out to Flour City Insurance Agency today and we'll help you get started!


bottom of page