Home vs Renters

Home vs Renters

What is the difference between Home and Renters insurance? Do you know? It can get confusing….we know. Let us help break it down.

Your landlord owns the actual building that you rent. So, your landlord needs to buy a homeowners policy for the structure itself. You own your stuff inside and you also have liability needs. So, you need to buy a Renters policy for your stuff and your liability. Both policies provide coverage for the address that you call home sweet home, however they both cover different things.

Say you rent an apartment and experience tornado damage. No fun for anyone, but that’s what we’re here for! If the tornado caused structural damage to your rented house, condo or apartment such as pieces of the roof are missing or windows are broken, then the landlord’s policy is on the hook for that. If you, as a renter, leave a candle burning and it starts a fire and burns down your rented house, condo or apartment building, then the liability on your renters policy could come into play. Another neat part of Renters or Home insurance is additional living expense. So, if your roof is damaged and you can’t safely and comfortably remain living in your home, then this coverage pays for you to temporarily stay somewhere else, like a hotel.

So remember that the landlord’s policy covers the actual structure. However, the damage is only covered if it was caused by a covered peril. Common perils covered on a Homeowner’s policy are: wind/hail, lightning, fire, theft and vandalism. You may have more concern with certain perils than others, depending on what region of the country you live in and what natural disasters are more likely to occur. People who live on the coast may wish to purchase hurricane coverage. If you live in Hawaii, volcanic eruption may be more of a concern. Either your Homeowners or Renters policy, and the perils they provide, can be personally crafted for you and your needs.

Now, let’s talk about what’s really important. YOUR STUFF! Both Renters and Homeowner’s policies routinely include Personal Property coverage, which quite simply, is a coverage limit for your stuff. The cost to replace belongings can quickly add up. Without insurance, renters and homeowners are at risk of paying out of pocket for any belongings damaged or destroyed by events that were out of their control such as a water leak in their home or a lightning surge damaging electronics. You can either choose to cover your personal property with replacement cost (how much it costs to replace them with new) or with actual cash value (cost new minus depreciation. Depreciation considers things such as age and obsolescence) Just another way that you can build your home or renters coverage to fit you and your individual needs! Did you know that your personal property coverage also extends to stuff in your car? So, if those personal property items, such as your laptop or clothes, that are stashed in your car are stolen or damaged in a storm, yep those are covered too. Your personal property coverage also has covered perils so be sure to review those and make sure you are good with the coverage provided.

Ok, the big question. How do I know how much personal property coverage I need? I have a lot of stuff! The easiest way to start figuring out how much coverage you want is to inventory your belongings. Take a look around your place and think about how much it would take to replace or repair everything in your home or apartment if it were damaged or stolen. Some people take pictures of each room, some use an app to categorize. However, you prefer to inventory is good with us. The important thing is that you have assessed well enough to have a good general idea of your belongings and that you purchase an appropriate amount of personal property coverage. Please be sure and note valuable personal property such as rare art and jewelry separately. Those typically need covered individually under a scheduled personal property endorsement which can be added to your Home or Renters policy for an extra cost. Receipts and appraisal may be required for those higher valued scheduled items.

Both Home and Renters policies will have a deductible and a premium. No surprise here but typically the higher the premium, the greater the coverage and perils provided and vice versa. Some additional factors affecting your premium are:

  • Property value
  • Fire protection
  • Condition of property
  • Construction characteristics of property such as roof, heating, siding, etc.
  • Claims history
  • Age of property
  • Coverages and deductible selected

Whether you are a renter or a homeowner, insurance is needed. You never know what life will throw at you so being prepared is key. Clever is here to help. However, it’s YOUR decision. Be sure to do your homework and build the policy that is best for you.


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