Whether you are renting or owning (chances are you will do both in your lifetime), knowing how the insurance differs for each is key. Since the coverages on a renters insurance policy are quite different from a homeowners insurance policy, it's good to know the difference.
Your independent insurance agent is the Albert Einstein of insurance policies and has the experience to back it up. If you are struggling to know which policy suits your needs, just have a chat with a knowledgable agent and you're sure to leave educated.
What Is Renters Insurance?
A renters insurance policy is similar to a homeowners insurance policy without all the extras that you wouldn't need because you don't actually own the property.
Key renters insurance coverages:
- Personal liability: This is financial coverage for your negligence in bodily injury or property damage.
- Personal property: Aka personal belongings coverage, this is coverage for all your non-permanently attached items such as furniture, clothing, and more.
- Additional living expenses: This is coverage if you have to move out of your rental home because of a claim, and will help pay for that stay.
- Theft and vandalism: This is coverage for property that is stolen or damaged due to theft or vandalism.
What Is Homeowners Insurance?
A homeowners insurance policy is going to provide all the coverages in a renters insurance policy and more because you actually own the property. There are also several different types of homeowners insurance policies depending if you live in a townhome, a historic home, a mobile home or a single-family residence. Since they all cover pretty much the same things, focusing on the single-family residence is a good starting point.
Key homeowners insurance coverages:
- All the coverages in a renters policy listed above
- Dwelling coverage: This is coverage for the actual property itself and is determined by running a replacement cost estimator.
- Additional structures: This coverage is provides coverage for detached garages, barns, and she-sheds.
Renters Insurance vs. Homeowners Insurance
When it comes to comparing the two, there really is no comparison. Each policy is for a different purpose. If you are renting a home, apartment, townhome, mobile home, or tiny home, you are in need of renters insurance. If you actually own one of those homes, then you are in need of a homeowners policy.
You see, there is no contest, no race to the finish when it comes to these policy types. Instead, it's what phase of life you are in. Your independent insurance agent can also show you your insurance company's specifics when it comes to renters or homeowners coverage. That way you will be maximizing all the coverages available to you.
Which Carrier Has the Best Renters and Homeowners Insurance?
Best is relative. Your independent insurance agent should be working with a number of different carriers that are hopefully all A-rated in the sense that they have enough reserves to back up their claims. Assuming both of those are true, then it comes down to not which carrier is the best, but which carrier is best for you and your specific situation.
No two carriers are alike, meaning they all offer different bells and whistles that your independent insurance agent will make you aware of. Once you know what you are looking at, you can make a well-rounded, educated decision.
The Cost of Renters Insurance vs. Homeowners Insurance
The long and short of the cost differences in a renters insurance policy vs. a homeowners insurance policy is simple, renters is cheaper. You are simply insuring less with a renters policy, therefore you will not have as much premium as a homeowners insurance policy.
You've learned that with a homeowners policy, you are insuring the actual structure of the home in addition to the liability, additional living expense, and personal property. You insure more, you pay more. It's a good general rule of thumb and your independent insurance agent can go over the prices with you so you can find a renters or homeowners policy to fit your coverage needs and budget.
Benefits of an Independent Insurance Agent
Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. Find an independent insurance agent in your community here.