Are you about to abandon your renter life and purchase your first home?

If the answer is yes, you’re in for a whole lot of excitement.

On the other hand, you can be a homeowner who made a decision to downsize and go for renting. Either way, finding a new home is a process that can be pretty time and money consuming as well as long and exhausting.

Still, getting insurance for your home is a key component. With that in mind, a lot of people make a mistake thinking that home insurance and renters insurance are pretty much the same things.

One of the most common misconceptions is that renter’s insurance is only good in replacing your personal property such as electronics, furniture, clothes and so on, in case that there’s some kind of damage or loss.

While this is true to a certain degree, there are significant differences between home and renters insurance. Moving to a new property isn’t just about you moving, it’s also about understanding to a whole new type of property insurance policies.

While both insurances are greatly founded upon personal property and liability coverage, there are some differences that you should clearly understand before you purchase your policy. So, here’s a comprehensive comparison between the two.

Structure Vs. Property Insurance

Home insurance covers your home which means the house you live in as well as any other building and structure on your property. There are exclusions as well as some limitations when it comes to valid claims and coverage amounts. With renter’s insurance, your rental unit where you live isn’t covered since it doesn’t belong to you, you rent it.

Instead, the building or the structure where you live is covered by your landlord’s insurance policy. This is one of the main and most important differences between home and renters insurances.

If you use a rental unit and a fire breaks out, the insurance of your landlord covers the damage to the building but, if the fire is your fault, your renter’s insurance will cover the repair costs. To better understand the differences, visit, for a home renters insurance guide.

The Cost Differences

The cost is a significant difference between home and renters insurance. Renter’s insurance doesn’t have as many costs and is mostly considered to be very affordable. With home insurance, things are a little bit different as there are a lot of things involved.

It’s more expensive simply because it’s insurance for your entire home. Townhouses and apartments are much smaller than houses in most cases, so house owners have more property and personal belongings, including valuable personal property such as furniture or fine art and so on.

Therefore, the insurance companies need to pay more to homeowners than renters. To understand the cost difference when you buy, you can find all the necessary information explained in this article.

Renter’s Insurance Policyholders Are Lagging Behind

The number of policyholders is also one of the most important differences between renter and home insurance.  It’s only natural to assume that renters would want all their personal belongings replaced just as bad as any homeowner but that isn’t the case. In fact, the number of home insurance policyholders may surpass the number of renter’s insurance policyholders.

That’s probably because every person is required to purchase condo or home insurance when they purchase the property while renters aren’t required to sign a lease in general. This might change as more and more landlords are starting to require this.


Even though home and renters insurances have some differences, the people who purchase them have one thing in common: they all have the tendency to somehow overlook policy exclusions. Most insurance policies cover a wide range of liability issues, injuries, and damages but there are always some limitations and exclusions, often written in fine print.

The problem is that people simply don’t bother to read these exclusions and that’s how most problems occur. These people wait until it’s too late to find out about some exclusion which is really unfortunate. To emphasize just how important exclusions are, here are the two most important ones: floods and earthquakes.

These are natural disasters that can change your life for the worst and insuring yourself against such sudden perils is the only way to make sure that you, your property, and your personal belongings, as well as your loved ones and family, are safe and secure.

Fortunately, it’s possible to add some extra insurance coverage for both floods and earthquakes. To learn about home insurance, read this Forbes article.

The Verdict

The type of your insurance greatly depends on your current state of affairs and status. It greatly matters if you own a home as well as if you don’t. A person who rents a home will be better off with renter’s insurance while a homeowner will be more protected with home insurance. Whatever your case may be, you need proper insurance.

It only takes one disaster to leave you on the street without a roof over your head and you will want to be prepared when that happens. With that in mind, the more you understand these differences, the more you’ll be able to make an educated decision about the next best course of action.