Many people have homeowners insurance but not as many renters have renters insurance. Both of these insurances are can help protect a person's personal property but there are some differences between these two types of insurances.
1. Coverage for the Structure
When a person has homeowner's insurance the structure of the home is covered as well as other buildings such as sheds that are on their property. There are some limitations and actual coverage will vary based on the policy. Renter's insurance does not cover the building, that is the responsibility of the landlord. There are some things that the renter's insurance will cover. For example if a fire breaks out and the tenant is found to be at fault the liability of their renter's insurance will cover the costs for repairs.
There is a difference in price between homeowner's and renter's insurance. Homeowner's policies tend to cost more because they cover more items. They cover the structure of the home and will need to cover the value of the home and the items in it if there is damage from a fire or other causes. Renter's insurance is designed to be more affordable and some policies cost as little as $20 a month. When a person owns a home they tend to have more personal property such as furniture which also makes the policy higher. If an insurance company has to pay out a home owner's claim they are going to have to put out a lot more money than a renter's claim.
3. Number of People with Coverage
One of the biggest difference is the number of people that have this coverage. Homeowner need to have insurance in order to protect their biggest investment which is their home. Many renters do not have insurance. This insurance is not required in many states and renters tend to bypass this insurance. Homeowners insurance is often mandatory while renters insurance is good to have but it is still optional.
4. Different Options
Renters have more options when it comes to purchasing a policy. They can get the insurance coverage that they need and will not have to pay for coverage that they are not going to use. If a person lives in a small studio apartment and does not have many possessions than they can get the lowest policy possible. Renters do not have to pay for options that they do not need. They will not have to worry about coverage for structural damage to the property. This will be covered by the policy that the landlord has. If a person has more expensive items in their home they can get a policy that will pay them out more money. Homeowners often need to take out the larger policies. This way it will cover their entire house and belongings and no just one small section. Their coverage needs to be for the entire house and the structure of the home.
Renters only need enough insurance to cover their personal property. This coverage will allow them to have protection if their belongings are lost due to something such as a fire or other environmental hazard. This items will also be covered if their apartment is broken into or stolen. A homeowner needs to have coverage on their personal property as well as the structure. They will also need liability coverage if someone is injured on their property. The insurance will help them if they get sued so they will not lose their home.
These are some of the major differences between homeowners and renters' insurance. Everyone should have insurance to protect their personal property. Homeowners need addition coverage to protect their physical structure while renters only need to protect their belongings. Since less coverage is needed renters' insurance is inexpensive and can fit just about any budget.