Renters vs. Homeowners Insurance: Understanding Key Differences

Renters insurance differs from homeowners insurance in that their coverage does not cover the physical structure of the dwelling, unlike homeowners insurance. Both policies cover personal belongings, liabilities and additional living expenses.

Renters insurance safeguards your possessions and offers liability coverage, making it an importatt choice for tenants. By contrast, homeowners insurance extends its protection to the structure of the home itself. Homeowners must ensure both their property and possessions are adequately covered.

Take a quick look at the differences between the two in the table below.

Renters insurance is a policy designed to protect individuals who lease or rent their living space, such as an apartment, condo or house. It covers personal belongings against risks like fire, theft or vandalism, provides liability protection if someone is injured in your rental and covers additional living expenses if a covered event leaves your home temporarily uninhabitable.

Even though renters don’t own the structure they live in, renters insurance ensures they’re financially protected from unexpected losses.

Renters insurance is ideal for anyone leasing a home or apartment, from students living off-campus to families renting houses. If you own valuable belongings, frequently host guests or want a financial safety net after disasters, renters insurance can be a smart and affordable way to safeguard your assets and avoid large out-of-pocket expenses after an incident.

Even if your landlord has insurance on the building, it won’t cover your personal property or liability. Renters insurance is therefore an important layer of protection.

Homeowners insurance is a policy designed to protect individuals who own the property they live in. It covers both the structure of the home and personal belongings, providing financial protection against damages or losses from events like fire, theft, vandalism, or certain natural disasters.

In addition to property protection, homeowners insurance often includes liability coverage in case someone is injured on your property, offering broader financial security.

Homeowners insurance is important for anyone who owns a home, whether it’s a single-family house, condo or townhouse. Although it’s not legally required, most mortgage lenders mandate it to protect their investment. Even if you own your home outright, having insurance is important — repair and replacement costs for your home’s structure or personal possessions can escalate quickly after a disaster.

Protecting your property, finances, and personal liability with homeowners insurance is a smart move to secure long-term peace of mind.

Although renters and home insurance provide valuable coverage, there are limitations to what these policies can protect against, such as floods and intentional damage. Being aware of these exclusions helps you avoid any surprises in case of an incident. Take a look at the exclusions:

The average cost of renters insurance is $12 per month for $20,000 in personal property coverage, while the average cost of home insurance is $218 per month for $250,000 in dwelling coverage. While renters insurance seems more affordable, it’s important to remember that, unlike home insurance, it doesn’t cover your dwelling, so premiums are typically lower.

However, costs for both insurance types can change based various factors, such as your dwelling coverage, state, deductible and more.

For $20,000 in personal property coverage, renters insurance costs $12 per month or $138 per year, but this can increase if you have higher limits. The table below shows how renters insurance costs can change by coverage level.

To find cheap renters insurance, consider comparing renters insurance quotes and find a provider that matches your needs and budget effectively.

A home insurance policy with $250,000 in dwelling coverage costs an average of $218 per month or $2,614 per year. Unlike renters insurance, home insurance pays to repair or rebuild your home if it’s damaged due to a covered event, which is why it costs more. Rates can still change, however, based on your coverage limits.

Explore the table below to see how rates can change based on your coverage.

The main difference between renters and homeowners insurance is structural coverage — only homeowners policies protect the building itself. But both cover personal belongings, liability and additional living expenses. Knowing how these policies differ ensures you choose the right protection for your living situation.

Renters insurance is different from homeowners insurance in that it doesn’t cover your dwelling or the structure of where you live, only your belongings. We answer common questions about their differences.

MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay — showing why it’s important to compare rates. 

Homeowner Profile

For our analysis, we created a sample homeowner profile with the following characteristics:

• Good credit score (769–792)
• Home constructed in 2000
• Wood-frame construction
• Composite shingle roof

Homeowners Insurance Coverage Details

Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:

• $250,000 in dwelling coverage
• $125,000 in personal property coverage
• $200,000 in personal liability coverage
• $1,000 deductible

We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.