Homeowners insurance vs. renters insurance

We look at costs, coverages, requirements, and more to help you decide whether you need a homeowners or renters insurance policy.

Kara McGinleyJennifer Gimbel

By

Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

&Jennifer Gimbel

Jennifer Gimbel

Managing Editor & Home Insurance Expert

Jennifer Gimbel is a managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

Updated|2 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Homeowners insurance and renters insurance are both types of property insurance — though they vary in who they're designed for and the types of coverages included. Read on to see how they compare in terms of costs, deductibles, discounts available, and more.

Homeowners insurance vs. renters insurance

Homeowners insuranceRenters insurance
Who needs it …HomeownersRenters
What it covers …Dwelling, other structures, personal property, liability, medical payments, and loss of usePersonal property, liability, and loss of use
What it costs …$1,899 per year on average$180 per year on average
Discounts available?YesYes
When it’s required …You have a mortgage on the homeVaries by landlord
How it’s paid …Premiums paid monthly, quarterly, or annuallyPremiums paid monthly, quarterly, or annually
Includes a deductible?YesYes
Learn more about homeowners insuranceLearn more about renters insurance

Ready to shop home insurance?

Start calculator

Homeowners vs. renters insurance: Who needs it?

Homeowners insurances and renters insurance are designed for two different types of dwellers — here's how it breaks down for each.

Home

Homeowners insurance

Homeowners insurance is designed to protect homeowners from the risks that come with home ownership, including coverage for the structure of your home, all of the contents inside of it, and protection against expensive lawsuits or medical bills if someone is injured on your property. It also includes loss of use and medical payments coverage, which we’ll discuss more below.

Save

Renters insurance

Renters insurance is designed to protect tenants from theft or damage to their property when they rent a home or apartment, as well as liability coverage for legal and medical bills if someone is injured while at your home.

Homeowners vs. renters insurance: What coverages are included?

Homeowners insurance and renters insurance include some of the same types of coverage — here's how it breaks down for each.

Home

Homeowners insurance

Homeowners insurance includes six main types of coverages:

  • Dwelling: Pays to rebuild your entire house from the ground up after a covered loss.

  • Other structures: Pays to rebuild other structures on your property like fences, sheds, or detached garages after a covered loss. 

  • Personal property: Pays to repair or replace your personal belongings after a covered loss.

  • Liability: Pays for medical and legal bills if someone is injured or their property is damaged while at your home and you’re found legally responsible.

  • Medical payments: Pays for smaller medical payments for your guests if they’re injured at your home — regardless of who is at fault.

  • Loss of use: Pays for hotel stays, dining out, transportation costs, and more if you need to live elsewhere after a covered loss to your home.

Renters

Renters insurance

Renters insurance includes three main types of coverages:

  • Personal property: Pays to repair or replace your personal belongings after a covered loss.

  • Liability: Pays for medical and legal bills if someone is injured or their property is damaged while at your home or apartment and you’re found legally responsible.

  • Loss of use: Pays for hotel stays, dining out, transportation costs, and more if you need to live elsewhere after a covered loss to your home or apartment.

When you rent a home or apartment, the dwelling and other structures coverage of the home is your landlord’s problem and is covered by their landlord or rental property insurance policy. That's why your renters policy doesn’t cover this. 

Keep in mind that the landlord’s policy does not cover your belongings, so if you want to ensure your property is covered, you’ll want to take out a renters insurance policy yourself. Some landlord policies include medical payments coverage if a tenant’s guest is injured while at the property, but this isn’t always the case.

Does home and renters insurance cover belongings stolen or damaged outside my home or apartment?

Yes, both home and renters insurance protect your property if it’s stolen, either from your home or off your property. 

For example, if someone breaks into your car and steals your laptop, your renters insurance or homeowners insurance policy would come into play for the stolen laptop (the broken windows would still fall to your car insurance company, though).

Homeowners vs. renters insurance: What perils are covered?

Both homeowners and renters insurance policies include the same covered and excluded perils, meaning specific types of damage both policies will or will not cover. 

Covered perils for homeowners and renters insurance

Most standard homeowners and renters insurance policies protect you from the following types of damage:

  • Fire, lightning, and smoke damage

  • Theft, vandalism, and riots

  • Windstorm and hail

  • Weight of snow, ice, and sleet

  • Falling objects

  • Damage from steam- or water-heating appliances

  • Leakage or overflow of water or steam

  • Freezing of plumbing, heating, air conditioning

  • Short-circuit damage caused by electrical appliances

  • Explosions

  • Damage by aircraft or vehicles (not your own)

  • Volcanic eruption

Excluded perils for homeowners and renters insurance

Most standard homeowners and renters insurance policies exclude coverage from the following types of damage:

  • Flooding

  • Earthquakes

  • Normal wear and tear

  • Negligence

  • Maintenance issues

  • Mold or fungus growth

  • Pest or rodent infestations

If you live in an area of the country that’s high-risk for flooding or earthquakes, you can typically add coverage to a renters or homeowners policy for protection from those natural disasters, or you can buy standalone earthquake insurance or a flood insurance policy. 

Ready to shop home insurance?

Start calculator

Homeowners vs. renters insurance: What does it cost?

Homeowners insurance is more expensive than renters insurance because it includes coverage for both the structure of the house, as well as the contents inside. Here's how it breaks down for each.

Home

Homeowners insurance

Homeowners insurance costs an average of $1,899 per year or $158 per month, according to our analysis of 2022 home insurance rate data across the county.

Homeowners insurance is more expensive than renters insurance because a home policy has dwelling coverage at its core. It’s a good idea for homeowners to have enough dwelling coverage to cover the cost to rebuild their entire home. 

That means if you live in a house that has a replacement cost of $300,000, you should have $300,000 worth of dwelling coverage. This is on top of the coverage you’d add to your policy to rebuild other structures on your property and pay for damage to your belongings and liability protection.

Renters

Renters insurance

Renters insurance costs an average of $180 per year or just $15 per month, according to 2017 data analyzed by the National Association of Insurance Commissioners (NAIC).

A standard renters policy typically contains around $30,000 in personal property coverage and $100,000 in liability coverage, making it a great value. 

What determines the price of home and renters insurance?

Insurance companies look at the following factors when determining the price of your renters or homeowners insurance premiums: 

  • Proximity to natural disaster risk zones

  • Crime rate where you live

  • Credit score

  • Claims history

  • Deductible amount 

  • Value of personal property

  • Discounts you qualify for

Homeowners vs. renters insurance: Are discounts available?

Insurance companies offer discounts for both homeowners and renters insurance. A few of the most popular discounts available include:

  • Safety discounts for installing a burglar alarm or deadbolt locks

  • Bundling discounts for bundling your renters or home policy with your auto policy

  • Loyalty discounts for being insured with the company for so many years

  • Paid-in-full discounts for paying your premiums in full instead of monthly

Another way to lower your premiums is to raise your deductible — this is the amount you have to pay out of pocket before your insurance company pays out your claim. Deductibles for both home and renters insurance typically range from $500 to $2,000. The higher your deductible, the cheaper your premiums will be. 

Reshopping your insurance every year is a good way to save on your premiums, too. It’s a good idea to shop around annually because another insurer may offer you the same coverage at lower rates. You can re-shop your home and renters insurance and compare companies with one of our Policygenius experts.

Homeowners vs. renters insurance: When is it required?

Neither are required by law, though you might still need to get homeowners or renters insurance depending on the below.

Home

Homeowners insurance

Homeowners insurance isn’t required by law, though most lenders require you to take out a homeowners insurance policy when you apply for a mortgage. This is because the lender has a financial interest in the home until the loan is completely paid off, so they want to ensure it’s fully protected against risks. The amount of home insurance coverage you’re required to take out varies by lender.

Renters

Renters insurance

Renters insurance isn’t required by law, though some landlords might require you to take out a renters insurance policy as a stipulation of your lease. 

Ready to shop home insurance?

Start calculator