What are the Differences Between Renter’s Insurance and Landlord Insurance?

The answer to this question has escaped many renters and property owners alike. Rental Choice (.com) can clear this up for many of our daily visitors. It is a common misconception for tenants that they do not need to purchase renters insurance because their landlord already has insurance. We will address this question and more.

Let’s start with landlord insurance, which seems to be a confusing subject, especially for renters. Landlords insurance protects a rental property owner from losing money due to property damage. It normally covers the structure itself and anything inside the building that belongs to the landlord, such as refrigerators and other appliances. These items are usually protected against natural disasters like fire, flood, storms, etc., but are also protected against theft and malicious damage. As with other types of insurance policies, each one is different, but this is the average landlord insurance policy. To sum it up, if it belongs to the renter, it’s not covered under landlord’s insurance policy.

Now, let’s consider renter’s insurance. Renter’s insurance provides protection which is similar to the benefits associated with homeowners insurance. The policy protects the renter and his property from the kinds of peril listed above. The major exception to this is that renters insurance doesn’t usually have anything to do with the building itself, just the contents belonging to the tenant. Renters insurance usually comes with a deductible, meaning that any damages must add up to a specific dollar amount before your policy covers any loss. Renter’s insurance deductibles vary from case to case, but are usually in the $500 range.

Here’s another common mistake renters make with regard to insurance: “My stuff’s not nice enough to insure, anyway.” What these renters fail to understand is that nearly every single renters insurance policy includes replacement cost coverage. This means that that if your 20 year-old mattress is lost in a fire, you will receive enough money to replace it with a brand new one. Or better yet, your old 24” tube TV will be replaced by a modern equivalent of the same thing. Since tube TV’s aren’t in production anymore, you will be getting a new flat screen TV. Although you might get the idea that renters insurance is supposed to get you nicer things than you have, the goal is to return you to the same condition you were in before you lost your property.

Now that you know the difference between renter’s and landlord insurance, and the purpose for each, you can make an informed decision as to the type of insurance you need. If you own rental property, we very strongly recommend purchasing landlord insurance to protect your investment. As a renter, why would you not protect your assets? For less than $20 a month (in some cases as little as $100 a year!) you can rest easy knowing that all of your earthly possessions are covered in the event of a loss. This one is a no-brainer, don’t take the risk of not having the right insurance policy in place to provide you with protection and peace of mind.

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