Home Insurance Vs Tenant: What’s the Difference?

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Owners and


Tenant insurance

provide protection for homeowners and renters, but unlike auto insurance,


home insurance

and renters insurance are not required by state law.

In 2014, only 37% of tenants had rental insurance, according to the Insurance Information Institute. Although owners are not required to have


home insurance

if there is a mortgage, the lender will require it to protect the investment.

Home insurance vs tenants

The difference between home insurance and tenant insurance is ownership. Landlords own the house, but tenants do not own the properties they rent.

According to Mike Gulla, director of underwriting at Hippopotamus. He told Insider that unlike renters insurance, which essentially covers your personal belongings, landlords own their home and therefore have a vested interest in making sure it’s well maintained.

Homeowners are responsible for repairs, maintenance and damage to their home and its structure. Home insurance protects the home and structures under the home’s coverage. Because tenants do not own the property, the landlord is responsible for the building and common areas.

*Available as an additional cover if not part of the policy

**Required if you are in a flood zone, but most homeowners experience flooding

What is home insurance?

Home insurance protects the home, your personal effects and provides liability coverage for injuries that occur on your property. If the postman slips and falls on your sidewalk, the dog bites a guest, a tree falls on your roof, or the neighbor’s child is injured in your pool, home insurance can protect you.

Home insurance also provides “additional living expenses” if your home becomes unlivable and you need to move temporarily.

Unlike auto insurance, home insurance is not required by the state. If you’re buying a home with a mortgage, your mortgage lender will require home insurance for loan approval, according to Hippo insurance.

Types of home insurance policies

Most people are familiar with renters insurance, homeowners insurance and


condominium insurance

, but there are eight types of home insurance policies depending on the type of home you are buying. Coverage will vary based on this.

What is tenant insurance?

The owner has insurance to cover the building and the structure. However, your personal belongings inside the rental unit are your responsibility. Basically, renters insurance covers your belongings against theft, damage and unforeseen events. Renters insurance policies cover up to a certain amount, usually around $20,000 or $30,000 of coverage.

Renters insurance covers your personal property, protects your personal liability if someone is injured in your rental or sues for damages, and provides “loss of use” if your rental becomes unlivable and you need of temporary accommodation.

Basic household effects are covered, but you may need additional coverage for specialty items like wedding bands or jewelry, cameras, artwork, bicycles or musical instruments.

How much does home and tenant insurance cost?

The latest study of J.D. Power, a consumer research firm that conducts consumer surveys, shows that renters care more about price when buying a policy, but owners are more concerned about customer service and a company’s reputation insurance. Therefore, while cost is a consideration, it is not as important to homeowners who want responsiveness from the insurance company if they file a claim.

The average cost of renters insurance is around $15 per month, or $180 per year. Some factors that go into determining your premium are the amount of coverage you want, where you live, if you have a pet, and your


credit score

. If you already have


car insurance

you can get discounts from your provider to bundle your renters and auto insurance.

Home insurance is more expensive than tenant insurance because it includes the cost of replacing or rebuilding the home, while tenant insurance simply covers the loss of personal effects.

For homeowners, the age of your home, the roof, the pipes, the air conditioning system, the appraised value of your home, the size of your home, your location and whether you have pets are factors in the calculation of insurance premiums.

Additionally, homes located in weather or disaster-prone areas – flood zones, hurricanes, tornadoes, wildfires, mudslides,


hail

and earthquakes – will have higher premiums as they are not included in the basic cover and will need to be supplemental policies using what is known as an endorsement.

Here’s how much homeowners insurance costs on average based on home value in the United States, according to the NAIC:

*The table above uses data from the NAIC.

How to find home or tenant insurance

If you currently have home or tenant insurance, review your policy coverage annually. If your homeowners or renters insurance company hasn’t provided the level of service you expect, it may be time for you to switch to a new provider.

How to get home insurance

For owners, remember that a cheap price does not mean good customer service. The average cost of homeowners insurance varies depending on the state you live in and whether you are urban or rural. Focus on customer satisfaction rankings, like those from JD Power, and the comparison store. This is especially important for those who live in disaster-prone areas.

How to get tenant insurance

Like homeowners insurance and auto insurance, renters insurance can vary widely from state to state. Where you live will play an important role in your quote, and each company will consider this differently.

To be sure you’re getting the best price for your renters insurance coverage, you’ll want to shop around and get quotes from several different insurers. Compare quotes and find the most coverage types and limits. Next, look for the lowest premiums that fit your budget.

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