Homeowners Insurance vs. Renters Insurance: Key Differences You Need to Know
Homeowners insurance and renters insurance are both crucial forms of insurance, depending on the type of living accommodations you’re residing in. Homeowners insurance is for homeowners and renters insurance is for renters. Whether you own your home, or rent your home, you’re going to want to have some form of protection in the event something happens which affects your living space. Homeowners insurance and renters insurance offer protection against damages, liability, repairs, and replacements. Read on to learn more about how homeowners insurance and renters insurance are similar and different. Additionally, understanding which policy will work best for you is valuable information you can apply to your next meeting with an insurance provider. Feel free to contact us for more information on how we can help you find the best homeowners insurance or renters insurance.
Homeowners Insurance: Comprehensive Property Protection
Homeowners insurance is designed for people who own their homes. This specific type of insurance covers the house itself, other structures in the property (such as garages or sheds), and the owner’s personal belongings. Here are the key aspects of homeowners insurance:
- Dwelling Coverage: Dwelling coverage is the core component of homeowners insurance. This component will provide coverage to the actual structure of the home from covered perils such as fire, wind, and hail.
- Other Structures: Offering protection for other structures not attached to the house, such as fences and detached garages.
- Personal Property: Homeowners insurance polices will typically cover personal belongings both inside and outside the home.
- Liability Protection: Liability protection will cover legal fees and damages if you’re deemed legally responsible for injury or damage to someone else who happens to be on your property or if your property ends up damaging other people’s property (i.e.: your tree falls onto your neighbor’s property, resulting in damage)
- Additional Living Expenses (ALE): If your home ends up damaged and requires repairs, ALE will cover the costs of living elsewhere while those repairs are being completed.
Renters Insurance: Protecting Personal Property & More
Renters insurance will provide similar coverage and protection as homeowners insurance does, yet without the coverage for the building itself, as the landlord will hold that responsibility. Key components of renters insurance include:
- Personal Property: Renters insurance will primarily cover your personal belongings against theft, loss, or damage
- Liability Protection: Similar to homeowners insurance, liability protection provides coverage if you are responsible for injury or damage to others
- Additional Living Expenses: If the rental property is damaged and becomes uninhabitable, this coverage helps with the cost of temporary housing
Key Differences Between Homeowners and Renters Insurance
- Coverage for the Structure: The fundamental difference is homeowners insurance will cover the home’s structure, while renters insurance will not
- Cost: Due to renters insurance not covering the building itself, it’s generally much less expensive than homeowners insurance
- Policyholder Responsibilities: Homeowners must consider the replacement cost of their home and ensure they have sufficient coverage, while renters on the other hand only need to cover their possessions and personal liability
Why These Differences Matter
When you’re able to further understand the differences between these types of insurance, you’re better suited to make the right decisions when it comes to determining the adequate level of protection without having to pay for unnecessary coverage. Homeowners must protect their entire property and assets against any large-scale financial loss. Meanwhile, renters need to focus on protecting their personal possessions and potential liabilities.
Choose Portsmouth Atlantic Insurance for All of Your Homeowners Insurance Needs
Whether you’re a homeowner or a renter, insurance is essential to protecting yourself from financial pitfalls due to unexpected events. When you understand the specific levels of protections each type of insurance offers, you’re in a better place to make a better decision. If you’re unsure about which kind of insurance best fits your needs for your respective rental property or home, you’ll want to contact us to learn more about how we can help. We look forward to hearing from you soon!