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Differences between homeowners and renters insurance

Fact-checked with HomeInsurance.com

No matter where you live, insurance provides essential protection for your belongings. How you insure them depends on your living arrangements. If you own an apartment, condo, or home, then you’ll want homeowners insurance, as this protects your personal property and any damage to the dwelling. 

Alternatively, if you’re renting a place, renters insurance is likely what you’ll end up looking for, as this covers any damage done to your personal property but does not cover the dwelling itself. While both policies offer similar coverages, each has different aspects. Here’s how each policy benefits you and how they differ from each other. 

Home versus renters insurance

The biggest differences between homeowners and renters insurance coverage are in what they cover. Renter’s insurance provides you coverage for any damage to your belongings, but it doesn’t cover damage to the actual structure. Typically, your landlord has a separate policy in place for that

Conversely, homeowners have a financial interest in protecting the structure in addition to personal property. Homeowners insurance policies protect the owner for damage or loss of the dwelling, inside and out. 


Both policies offer similar protection for:

  • Damage incurred to personal property
  • Liability protection if anyone is injured on your property
  • Cost of living expenses associated with moving, hotel, dining and more if your home is uninhabitable


With renters insurance, coverage extends to personal property, up to a specified limit. In addition, personal liability coverage compensates for the medical bills of anyone injured in your residence. Lastly, renters insurance provides additional living expenses if you cannot live in your apartment anymore because of damage or necessary repairs.

With homeowners insurance, you also receive coverage for personal property, personal liability, and additional living expenses. Furthermore, you’ll receive coverage for any damage done to your building in covered losses (depending on the details of your policy). 


There are exclusions that insurance companies might not cover. For homeowners, this includes damage incurred from earthquakes, flood, lightning, hail, mold damage, damage caused by animals, normal wear and tear, pollution, and coverage for higher-priced items such as jewelry, artwork, and more. Optional coverages can address some of these issues as add-ons to your homeowners policy.

Similarly, some renters insurance policies exclude coverage for natural disasters such as earthquakes and hurricanes. While your personal belongings may be covered in the event of damage, the same does not necessarily apply to other residents’ possessions unless they are also on the policy.

Here’s a breakdown of what each policy covers: 

Coverage type Included in renters insurance? Included in homeowners insurance?
Personal propertyYesYes
Personal liabilityYesYes
Additional living expenses (ALE)YesYes
Medical PaymentsYesYes

What does renters insurance cover?

Renters insurance covers damage or loss of your personal belongings due to a covered event. It can also cover living expenses such as renting an apartment, moving your items, and food if you have to be displaced from your current apartment. Liability protection provides financial compensation for legal or other medical fees associated with another person being injured in an accident on your property. 

What does homeowners insurance cover?

Homeowners insurance also provides compensation for damaged or destroyed personal property, personal liability, and additional living expenses. Coverage to the structure is the fourth aspect covered by homeowners insurance. In the event of a covered loss such as hail or storms, if your claim is approved, insurance will pay for the required repairs to your dwelling. 

The costs of renters versus homeowners insurance

Renters insurance fits almost every budget as it is not very expensive. According to the Insurance Information Institute, the average annual cost for renters insurance is around $300, or around $25 per month. Meanwhile, homeowners can expect to pay $1,211 annually. However, keep in mind that homeowners insurance provides much more comprehensive coverage, so the higher average annual cost is to be expected. 

Factors that influence renters and homeowners costs

Both types of insurance share similar influencing cost factors such as: 

  • Where you live (specifically it’s in a zone at high risk of natural disasters)
  • How much personal property coverage you need
  • Your deductible amount
  • Proximity to first responders
  • Your credit score (in certain cases)

In addition to these, homeowners insurance costs are affected by factors related to the structure. These can include the following, for example:

  • The age of the building
  • Style/complexity of the building
  • Quality of materials
  • Any other building(s) on your property
  • Any remodels done including security upgrades, storm shutters, and more

How to shop for renters and homeowners insurance

Renters and homeowners insurance is a fairly simple process, depending on how you choose to go about it. There is a bit more involved with purchasing homeowners insurance, so let’s look at how both processes work.

Buying renters insurance

Most providers offer the option to call over the phone to secure renters insurance, visit in person or submit a request through its website to receive a quote and purchase. The whole process is typically fairly quick and simple. To conduct the purchase, you’ll need to have basic information on hand such as your name, address, the type of dwelling you live in (apartment, townhouse, etc), and how much personal property coverage you want. The insurance provider may also ask about security features present at the rental property. Once you provide the necessary information, you’ll receive a quote and if the terms are favorable, you can opt in and receive proof of insurance almost immediately.

Buying homeowners insurance

Buying homeowners insurance works in much the same way. You can either work with your existing provider (if you have car insurance) or shop around to receive and compare a few quotes. Along with basic personal information, some questions you might encounter include:

  • How old is your home’s roof?
  • What is the value of your home?
  • Have you done any remodeling?
  • Does the home have a security system?
  • Is there a pool on the premises?

If you’ve had an inspection of your home prior to contacting insurance, you can find the report helpful in providing answers to these questions. During this time, it’s vital to assess other risks as well. For example, if you live in an area prone to flooding, you should discuss the pros and cons of flood insurance in case you want protection for that possibility. High-value items are another common consideration for homeowners insurance.

The takeaway: Find coverage that fits your needs

  • Renters and homeowners insurance offer similar protection to personal property
  • Homeowners insurance differs in that it also covers damage done to the building
  • There are exclusions such as flood and earthquake both policies might not cover
  • You might need to add additional coverage for higher-priced items or for additional risks related to your home’s location and proximity to natural disasters or extreme weather.

Both policies are intended to assist you financially in recovering what was lost during a disastrous event. Renters insurance is affordable and offers adequate protection options. On the other end of the spectrum, homeowners insurance also covers damage done to your home and other buildings on the property. It also offers more customizable coverage options if you have higher value belongings to protect, or live in an at-risk area prone to disasters.

Both policies are easy to obtain. By doing your homework ahead of time, you’ll have a better idea of how much coverage you need as well as any optional coverages you want to add.

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