Homeowners vs Renters Insurance: What Changes, What Doesn’t, and Who Is Responsible for What
Homeowners vs renters insurance is ultimately about one question: who is financially responsible for the structure. Everything else flows from that distinction.
When you rent, you insure your belongings and your liability. When you own, you insure the building itself in addition to those exposures. That shift represents a meaningful transfer of financial risk.
If a kitchen fire occurs in a rental apartment, the landlord’s policy typically addresses structural repairs. The tenant’s renters policy responds for damaged belongings and potential liability. If that same fire occurs in a home you own, both the structure and contents fall under your responsibility.
Understanding this difference early prevents confusion later.
Table of Contents
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.
Who Insures the Structure?
The structure is the dividing line.
When you rent, the landlord insures the building. Your responsibility is limited to:
- Personal belongings
- Personal liability
- Temporary living expenses
The roof, framing, plumbing inside walls, and structural systems belong to the property owner’s insurance.
When you own, that responsibility transfers to you. Storm damage, fire loss, or structural water damage becomes your claim.
This is why homeowners insurance costs more. You are insuring the asset itself, not simply its contents.
| Risk Type | Renter | Homeowner |
| Building Structure | Landlord’s policy | Your homeowners policy |
| Personal Belongings | Your renters policy | Your homeowners policy |
| Liability | Your renters policy | Your homeowners policy |
| Temporary Living | Your renters policy | Your homeowners policy |
Many homeowners only recognize this shift after a loss. Clarity beforehand allows for more thoughtful decisions.
Common Misunderstandings
Myth: My landlord’s insurance covers my belongings.
Reality: It covers the structure, not your personal property.
Myth: Renters insurance covers the building.
Reality: It protects contents and liability only.
Myth: Homeowners insurance includes flood coverage.
Reality: Flood insurance is typically separate, particularly in coastal New Hampshire.
These distinctions often surface during claims. Reviewing them beforehand avoids difficult surprises.
Frequently Asked Questions
Is renters insurance required in New Hampshire?
No statewide requirement exists. However, many landlords include renters insurance as a lease condition. While the state does not mandate coverage, lease agreements commonly require tenants to carry liability protection.
Does homeowners insurance cover tenants?
No. A landlord’s homeowners policy protects the structure and the owner’s liability. It does not cover a tenant’s personal belongings or personal liability. Tenants need their own renters policy for protection.
Who pays for renter-caused fire damage?
If negligence is involved, the renter may be legally responsible. The landlord’s insurance typically repairs the structure, while the renter’s liability coverage may respond for damages they caused.
Is liability coverage the same for renters and homeowners?
The coverage structure is similar, but homeowners policies usually carry higher limits. Ownership increases premises exposure and potential claim severity, which often requires broader protection.
Does renters insurance cover theft outside the home?
Yes, most renters policies include off-premises coverage. Stolen items such as laptops or bicycles may be covered, subject to policy limits and deductibles.
Why is homeowners insurance more expensive than renters insurance?
Homeowners insurance covers the dwelling itself in addition to belongings and liability. Insuring the physical structure increases claim severity and reconstruction exposure.
Does homeowners insurance automatically cover flood damage?
No. Standard homeowners policies typically exclude flood damage. Separate flood coverage is often necessary, especially in coastal areas.
Choose Portsmouth Atlantic Insurance for All of Your Homeowners Insurance Needs
If you rent, you are responsible for your belongings and liability.
If you own, you are responsible for the structure, your belongings, and liability.
If you are preparing to purchase, reviewing coverage before closing ensures your protection reflects actual exposure.
Insurance is not simply a policy change. It is a shift in financial responsibility. If you would like a thoughtful second review of your current coverage, Portsmouth Atlantic Insurance can walk through it with you and clarify where protection may need adjustment.