When it comes to protecting your home and personal belongings, it's important to understand the difference between home insurance and renters insurance. Homeowners insurance covers the building you live in, such as a house or apartment, as well as any associated structures like garages. This type of insurance also covers your personal property. On the other hand, renters insurance is purchased by tenants and covers damage or theft of their personal belongings, but not damage to the building itself. If you're a dependent, your parents' housing policy may cover your things even if you don't live at home.
In this case, you may not need renters insurance. This coverage is usually limited to 10% of the personal property coverage in the homeowners policy. Renters insurance policies are purchased by tenants who live in a building that is owned by someone else. The owner or management company has a separate policy for protecting the building. The main difference between a renters insurance policy and homeowners insurance policy is home coverage, also known as the physical structure of your home.
Tenants are usually responsible for everything inside their home, while the landlord will cover any damage to the building or rental unit through their homeowners insurance policy. However, there are some specific hazards that are almost always excluded from home insurance coverage, such as floods and earthquakes. In this case, you would need to buy a homeowners policy since a standard home insurance policy doesn't cover rental situations due to increased risk and liability. Neither a home nor renters insurance policy is required by law, but it could be a stipulation in a mortgage or lease agreement. The events covered, also called hazards, in insurance parlance may differ, but in general they are quite similar between insurance companies. To determine what insurance coverage you qualify for, you'll need to calculate the value of your home and major possessions. What insurers consider is replacement value, or the cost of rebuilding and replacing everything, as opposed to the market value of the home. Depending on the location, type, and risk, a landlord's policy typically costs 20 to 25% more than a home insurance policy.
Otherwise, the policies are basically the same so you wouldn't need both renters insurance and homeowners insurance to cover your property in the same residence.
Homeowners Insurance
policies should be set equal to or greater than the replacement cost of your home. Homeowners insurance is not the same as renters insurance or homeowners insurance. Homeowners insurance is more expensive than renters insurance because it covers more properties, properties that are most vulnerable to hazards, and higher-value properties. Both homeowners insurance and renters insurance cover slightly different types of property damage so it's important to know the difference before you get coverage. Because companies expect to pay much higher claims to homeowners than to renters, homeowners insurance policies cost much more on average than renters insurance policies. It's important for homeowners and tenants alike to understand what type of coverage they need in order to protect their homes and belongings from potential damage or theft.Knowing what type of coverage you need can help you make an informed decision when it comes time to purchase an insurance policy.
