The Difference Between Renters vs. Homeowners Insurance

Enter your ZIP code to get started


Free. Simple. Secure.

Banner image
ByMark Fitzpatrick
Edited byRae Osborn
ByMark Fitzpatrick
Edited byRae Osborn

Updated: May 22, 2024

Advertising & Editorial Disclosure

The key difference between renters and homeowners insurance is that renters insurance does not cover the dwelling itself, while homeowners insurance does. However, both types of policies cover the replacement of personal belongings, liabilities and additional living expenses. Understanding the differences between renters vs. homeowners insurance is crucial in determining the appropriate insurance for your living situation, whether you're renting or own the home you live in.

Key Takeaways

building icon

Renters insurance protects the personal belongings and liability of individuals renting a home or apartment

mortgage icon

Homeowners insurance provides coverage for the structure of a home, personal possessions and liability for homeowners.

bigHouseRent icon

Renters insurance is for individuals renting their home, while home insurance is intended for homeowners who own the property they live in.

An Overview of Renters vs. Homeowners Insurance

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

In other words, renters insurance safeguards your possessions and offers liability coverage, making it a crucial choice for tenants. In contrast, homeowners insurance extends its protection to the structure of the home itself, making it essential for homeowners to 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
Homeowners Insurance

Dwelling Coverage

Pays for repairs to your home in case of damage

Personal Property Coverage

Pays to replace or repair personal belongings following a covered event

Liability Coverage

Pays for legal fees in the event you are sued due to a covered incident

Medical Payments Coverage

Pays for medical expenses of third parties injured on your property

Additional Living Expenses (ALE)

Pays for your temporary living expenses if you must leave your home due to a covered situation

mglogo icon

Both homeowners insurance and renters insurance policies offer coverage for specific perils or risks. These policies typically protect against a common set of perils, ensuring financial security in the face of unexpected events. Here are the perils commonly covered by both types of insurance:

  • Fire and Smoke
  • Theft
  • Vandalism
  • Windstorm or Hail
  • Storm and Lightning
  • Falling Objects

It's important to note that while these perils are generally covered, policy details and exclusions can vary, so you should thoroughly review your specific insurance contracts to understand the full extent of coverage.

What Is Renters Insurance and Who Needs It?

Renters insurance is policy designed for individuals who rent their homes or apartments. It provides essential protection by covering personal belongings, liability in case of accidents, and additional living expenses in case a covered event, such as a fire or theft, renders the property uninhabitable.

Renters insurance is best suited if you’re leasing your living space, whether as a student living in an apartment or someone leasing a house, as it ensures your possessions are safeguarded. The added liability coverage also offers peace of mind, especially if you frequently have guests.

What Is Homeowners Insurance and Who Needs It?

Homeowners insurance is a financial safety net for individuals who own the property they live in. It protects the home's structure and personal belongings, covering damages or losses due to various perils like fire, theft or natural disasters.

While it’s not something required by law, homeowners insurance is typically required by most mortgage lenders. Even if it isn’t required, having home insurance is an excellent idea if you own a home, as the cost to replace or replace the foundation or your belongings can rise quickly, depending on the cause of damage.

What Doesn’t Home and Renters Insurance Cover?

While both 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:

  • Flood Damage: Standard home and renters insurance policies do not cover personal property damage caused by floods, but depending on where you live, you can purchase separate flood insurance.
  • Earthquake Damage: Earthquake damage is not covered under renters or home insurance, but if you live in an earthquake-prone area, you might be able to get coverage as an optional add-on.
  • High-Value Items: Valuables like jewelry, fine art or collectibles may require an add-on policy or scheduled personal property coverage.
  • Pest Infestations: Furniture damage from pests like termites or bed bugs is usually not covered under renters and home insurance.
  • Intentional Damage: Damage caused intentionally by the policyholder is not covered.
  • War or Nuclear Incidents: Acts of war or nuclear accidents are typically excluded.
  • Maintenance and Wear and Tear: Neither renters nor home insurance covers damage due to lack of maintenance or wear and tear.
  • Home Businesses: If your home is also your place of business, you might need to add an in-home business policy, as any business-related losses will not be covered by home or renters insurance.

Renters Insurance vs. Homeowners Insurance Costs

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.

Average Cost of Renters Insurance

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. Look at the table below to see how renters insurance costs can change by coverage level.

$20K Personal Property / $100K LiabilityAnnual Premium$138
$50K Personal Property / $100K LiabilityAnnual Premium$229
$100K Personal Property / $100K LiabilityAnnual Premium$374
$250K Personal Property / $300K LiabilityAnnual Premium$757

To find cheap renters insurance, it’s essential to compare renters insurance quotes and find a provider that matches your needs and budget effectively.

Average Cost of Home Insurance

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.

$100K Dwelling / $50K Personal Property / $100K LiabilityAverage Annual Premium$1,518
$250K Dwelling / $125K Personal Property / $200K LiabilityAverage Annual Premium$2,614
$500K Dwelling / $250K Personal Property / $300K LiabilityAverage Annual Premium$4,373
$750K Dwelling / $375K Personal Property / $500K LiabilityAverage Annual Premium$6,139
$1MM Dwelling / $500K Personal Property / $1MM LiabilityAverage Annual Premium$7,947
mglogo icon

The highest coverage isn’t always the best. You should carefully assess your coverage needs and compare home insurance quotes to balance adequate protection and affordability.


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. Take a deeper dive into the difference between renters and home insurance through our answers to some of the most frequently asked questions.

What is the difference between homeowners insurance and renters insurance?
Can you have both homeowners insurance and renters insurance?
Is homeowners insurance different from landlord insurance?

About Mark Fitzpatrick

Mark Fitzpatrick headshot

Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.