Is homeowners insurance the same as renters insurance?
Homeowners insurance differs from renters insurance in a few ways. Most importantly, homeowners provides more coverage. It covers the structure of your home for damage from a storm, fire or other covered peril as well as any other structures on the property. Homeowners insurance also covers your personal belongings and includes personal liability coverage.
Renters insurance covers only these last two things: your personal property and personal liability. When you rent, your landlord carries the insurance for the structure of the building, so you don’t have to.
Both homeowners and renters insurance offer loss of use, or additional living expenses coverage if you can’t live at home during repairs on a covered loss.
Because it covers so much more, homeowners insurance is much more expensive.
What is the primary difference between homeowners insurance and renters insurance?
The primary difference between homeowners insurance and renters insurance is what’s covered.
“The primary difference is that homeowners insurance covers the dwelling — your home,” says Cindy Baroway, executive director of the Risk Management and Insurance (RMI) program at the University of Colorado Denver Business School. “Renters insurance covers what’s inside your home, which homeowners insurance also covers. The landlord that a renter rents from would provide the property (dwelling) coverage for the rented home. Both policies provide liability coverage.”
Homeowners has the following coverage sections:
- Coverage A: Dwelling (covers the structure of the house)
- Coverage B: Other structures (covers other structures like a fence or detached garage)
- Coverage C: Personal property
- Coverage D: Loss of use/additional living expenses
- Coverage E: Personal liability
- Coverage F: Medical payments to others/guest medical
Renters insurance doesn’t cover any structures, so the first two on the list above aren’t included. It covers:
- Personal property
- Loss of use/additional living expenses
- Personal liability
- Medical payments to others/guest medical
Homeowners insurance vs. renters insurance cost
Because homeowners insurance covers the structure, it costs a lot more. The average annual cost of a home insurance policy is $2,601, which works out to about $217 a month. Compare that to an average renters policy which only costs about $263 for the whole year.
Take a look at the charts below to see what you might pay for homeowners insurance vs. renters insurance. Home insurance prices are largely based on how much dwelling coverage you need. Dwelling coverage is based on replacement cost, which is what it would cost to rebuild the structure of your home. It factors the most into your insurance costs.
You’re looking at an average annual cost of $1,988 for a home that has $200,000 in dwelling coverage and $100,000 in liability coverage. That’s about $165 a month. Most experts recommend more liability, which only increases your premium by a few dollars.
$600,000 of dwelling coverage can cost upwards of $4,600 per year, which works out to $387 a month. Rates also depend on where you live and the details of your actual home– you could pay more or less.
| Dwelling coverage | Liability | Average annual premium |
|---|---|---|
| $200,000 | $100,000 | $1,988 |
| $200,000 | $300,000 | $2,005 |
| $300,000 | $100,000 | $2,582 |
| $300,000 | $300,000 | $2,601 |
| $400,000 | $100,000 | $3,211 |
| $400,000 | $300,000 | $3,231 |
| $600,000 | $100,000 | $4,651 |
Renters insurance is much less expensive, as you can see from the chart below. Prices range from less than $200 a year to just over $300 a year for different levels of coverage – about $15 to $28 a month. There is no dwelling coverage to factor in, so prices are mostly based on personal property coverage.
| Personal property coverage | Annual rate with $100,000 liability | Annual rate with $300,000 liability |
|---|---|---|
| $20,000 | $177 | $193 |
| $40,000 | $246 | $263 |
| $60,000 | $315 | $333 |
Is homeowners insurance more expensive than renters insurance?
Yes, homeowners insurance is more expensive than renters insurance. Homeowners insurance covers more, including the structure of your home. The bigger the home, the more expensive the insurance policy will be because there’s a lot more to rebuild.
“There is a major cost difference between the two since homeowners insurance covers your dwelling,” Baroway says.
The size and construction of the home doesn’t impact the cost of renters insurance, just what you have inside the home.
Why are the premiums for homeowners insurance more expensive than those for renters insurance?
Premiums for homeowners insurance are more expensive than renters insurance doesn’t cover the structure of the home, while homeowners insurance does.
With renters insurance, you’re only paying to cover your personal belongings and personal liability. Your landlord is responsible for insuring the structure of the building you live in and other things like garages, fences or sheds.
Home insurance FAQs
Which coverage is included in homeowners insurance but not in renters insurance?
Dwelling and other structures, coverage A and B, are included in homeowners but not in renters. These coverages pay to rebuild the structure of your home and any other structures on the property like fences, sheds, detached garages or gazebos.
Who pays for home insurance when you’re renting?
When you’re renting, your landlord is responsible for paying for the homeowners insurance on the building. You are responsible for buying renters coverage for your personal belongings and personal liability.
Can you have homeowners insurance and renters insurance?
Yes, but it’s not usually needed, “Unless you own a home in one location and then rent in another, I’m not sure why anyone would have both at the same time,” Baroway says. “Homeowners insurance requires property ownership. If you do not own the home, then you do not need homeowners insurance. You would only want to purchase renters insurance."
If you have a homeowners policy, your personal liability and personal property coverage follow you anywhere in the world. That means if you go on vacation or even rent a house for several weeks or months somewhere else, you have coverage from your home insurance policy.
Does homeowners insurance cover renters?
Homeowners insurance covers damage caused by renters, but it does not provide any coverage for the renters themselves. They must purchase renters insurance to protect their personal belongings and personal liability.
Helpful home insurance tools and calculators
