Renters vs Homeowners Insurance: Complete Comparison
Whether you rent or own affects what type of property insurance you need. This guide explains the key differences between renters insurance and homeowners insurance.
Quick Comparison
| Feature | Renters Insurance | Homeowners Insurance |
|---|---|---|
| Covers Building | No (landlord’s policy) | Yes |
| Covers Belongings | Yes | Yes |
| Covers Liability | Yes | Yes |
| Average Monthly Cost | $15-30 | $100-250 |
| Typically Required? | Sometimes by landlord | Yes, by mortgage lender |
| Best For | Tenants | Property owners |
What Does Renters Insurance Cover?
Renters insurance protects tenants without covering the building structure (that’s your landlord’s responsibility).
Coverage Included
Personal Property
- Furniture, electronics, clothing
- Appliances you own
- Jewelry (with limits)
- Sports equipment
- Coverage typically follows you anywhere
Liability Protection
- Injuries to guests in your rental
- Damage you cause to others’ property
- Legal defense costs
- Dog bite liability (breed restrictions may apply)
Additional Living Expenses
- Hotel costs if rental is uninhabitable
- Temporary housing
- Extra food expenses
- Moving costs
What Renters Insurance Doesn’t Cover
- Building structure (landlord’s responsibility)
- Roommate’s belongings (unless named on policy)
- Flood damage (requires separate policy)
- Earthquake damage (requires endorsement)
- Your car (covered by auto insurance)
What Does Homeowners Insurance Cover?
Homeowners insurance is more comprehensive because you’re responsible for the entire property.
Coverage Included
Dwelling Coverage
- Home structure
- Attached garage
- Built-in appliances
- Roof, walls, foundation
- Rebuilding costs after covered loss
Other Structures
- Detached garage
- Sheds, fences
- Guesthouses
- Swimming pools
Personal Property
- All belongings inside home
- Items stored elsewhere
- Valuable items (with limits)
Liability Protection
- Injuries on your property
- Damage you cause to others
- Legal defense costs
- Medical payments to guests
Additional Living Expenses
- Temporary housing if home is uninhabitable
- Restaurant meals above normal food costs
- Storage fees
What Homeowners Insurance Doesn’t Cover
- Flood damage (requires separate flood insurance)
- Earthquake damage (requires separate policy)
- Normal wear and tear
- Pest infestations
- Home business equipment (may need endorsement)
Cost Comparison
Renters Insurance Costs
- Average monthly: $15-30
- Average annual: $180-360
- Deductible: $250-1,000
Factors affecting cost:
- Location and crime rates
- Coverage amount
- Deductible chosen
- Claims history
Homeowners Insurance Costs
- Average monthly: $100-250
- Average annual: $1,200-3,000
- Deductible: $500-2,500
Factors affecting cost:
- Home value and rebuild cost
- Location (weather, crime)
- Age and condition of home
- Coverage limits
- Claims history
Coverage Amounts
How Much Renters Coverage Do You Need?
Create a home inventory to determine coverage needs:
| Category | Typical Value |
|---|---|
| Furniture | $3,000-10,000 |
| Electronics | $2,000-5,000 |
| Clothing | $2,000-8,000 |
| Kitchen items | $1,000-3,000 |
| Total | $8,000-26,000 |
Most renters need $20,000-50,000 in personal property coverage.
How Much Homeowners Coverage Do You Need?
Dwelling coverage should equal rebuilding cost (not market value):
- Calculate square footage × local building costs
- Include upgrades and custom features
- Review annually as costs increase
Personal property is typically 50-70% of dwelling coverage.
When You Need Each Type
You Need Renters Insurance If:
- You rent an apartment, house, or condo
- Your landlord requires it (increasingly common)
- You want to protect your belongings
- You want liability protection
You Need Homeowners Insurance If:
- You own your home (required by mortgage lenders)
- You own a condo (though condo insurance differs)
- You want to protect your largest asset
Transitioning From Renting to Owning
When you buy a home:
- Get quotes early - Lenders require proof of homeowners insurance before closing
- Consider bundling - Combine with auto for discounts
- Increase coverage - You now need much more than renters coverage
- Review annually - Adjust dwelling coverage as home value changes
Making Your Decision
The decision is usually straightforward:
- Renting? Get renters insurance
- Own your home? Get homeowners insurance
The real decisions are:
- How much coverage do you need?
- What deductible makes sense?
- Which endorsements (flood, earthquake, valuables) do you need?
Related Guides
Frequently Asked Questions
What is the main difference between renters and homeowners insurance?
Homeowners insurance covers the building structure plus your belongings and liability. Renters insurance only covers your belongings and liability—the landlord’s policy covers the building structure.
Is renters insurance cheaper than homeowners insurance?
Yes, significantly. Renters insurance averages $15-30/month while homeowners insurance averages $100-250/month. The difference is because renters policies don’t cover the building structure.
Do I need renters insurance if my landlord has insurance?
Yes. Your landlord’s insurance only covers the building, not your personal belongings. If there’s a fire, theft, or water damage, you’d need renters insurance to replace your furniture, electronics, and clothing.
Does renters insurance cover my roommate's belongings?
No, standard renters policies only cover the named insured’s belongings. Roommates need their own policies, or you can add them as named insureds on your policy for an additional premium.
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