What is the difference between home insurance and renters insurance?

Do you know the difference between homeowners and renters insurance? Our at-a-glance chart helps you compare them side-by-side.

Whether you rent your home or own it, you need insurance to protect it. Yet, surveys show a drastic difference between renters and homeowners that have insurance. Only about 41 percent of renters have renters insurance compared to 95% of homeowners who have home insurance.

That’s just one difference between homeowners insurance and renters insurance. Although both can provide financial protection against property damage, legal liability, medical payments to others and additional living expanses (ALE), there are several other differences between these two types of policies.

In the chart below, we outline the key differences between homeowners and renters insurance, what type of coverages each one offers and why these policies are important to protect your home . . . whether you own or lease.

Side-by-Side Comparison of How Homeowners Insurance Differs from Renters Insurance

 Homeowners InsuranceRenters Insurance
Who it coversPeople who own their homeTenants who lease their residence
What it coversPhysical building structure (ex. house, garage, shed, etc.

Personal belongings (ex. furniture, TV, clothes, etc.)

Liability

Medical payments to others
Additional living expenses
Personal belongings (ex. furniture, TV, clothes, etc.)

Liability

Medical payments to others

Additional living expenses  
Why you need itLenders typically require it if/when you apply for a mortgageMany landlords require it when you sign a lease since their policies only pay to repair the structure (and not replace your things) if damage occurs
How it covers youPays to repair or rebuild your home and/or replace your personal belongings (ex. furniture) after a fire, theft, vandalism, falling tree, or bad weather, such as: lightning, wind, or hail, causes damage.

Provides coverage if your things are stolen from your property.

Pays for extra living expenses if your home becomes unlivable when it’s damaged (by a danger listed in your policy) and you have to spend money on a temporary place to live (ex. hotel) while it is being repaired.

Pays legal fees if you’re sued over an incident that happens on your property.

Helps to pay for someone’s medical bills if they get hurt on your property and you’re legally responsible. Also helps to pay to repair damages you cause by accident to another’s property.  
Pays to replace your things which are damaged by fire, smoke, lightning, storms, theft, explosions, faulty plumbing or any other disaster listed in the policy.

Provides coverage if your apartment, car, or storage unit is broken into and your things are stolen.

Pays for extra living expenses if your rental becomes unlivable when it’s damaged (by a danger listed in your policy) and you have to spend money on a temporary place to live (ex. hotel) while it is being repaired.

Pays legal fees if you’re sued over an incident that happens in your rental.  

Helps to pay for visitor’s medical bills if they get hurt in your rental and you’re legally responsible. Also helps to pay to repair damages you cause by accident to another’s property.
What levels of coverage you can consider Actual cash-value coverage which reimburses you for the cost of the item(s) at the time of the loss, minus depreciation and your deductible.
or

Replacement cost value which would reimburse the full value of buying a new item.
or

Extended replacement cost/value which pays for whatever it costs to repair or rebuild your home—even if it’s more than your policy limit. 
Actual cash-value coverage which reimburses you for the cost of the item(s) at the time of the loss, minus depreciation and your deductible.
or

Replacement cost value which would reimburse the full value of buying a new item.  
What forms are availableHO-1-narrow coverage; not in most states

HO-2-expands coverage to include water damage from plumbing and falling objects

HO-3-
provides broad protection for many types of damages, but only covers personal items for specific ones

HO-5-covers almost all damages, unless excluded

HO-8-covers older, historical homes
HO-4 only

What you will pay for…

Average cost per year

Common deductible(s)  

$1,272

$500-2,000

$174

$500


Whether you need homeowners or renters insurance, a member of the Guided team is ready to help you with a solution that can fit your needs. Connect with us today!

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Leave the insurance to us.

Resources

All health insurance sold is processed through the licensed entity of Baldwin Risk Partners.

Guided Solutions is not affiliated with or endorsed by Medicare or any government agency. Guided Solutions does not discriminate based on race, color, national origin, age, disability, or sex.