Insurance: Homeowners vs. Renters

When looking at the most basic difference between homeowners and renters insurance, it’s right there in the name—renters insurance is for those who are renting a home, homeowners is for the people who own a home. It’s self-explanatory…except when it isn’t. Be careful of some key differences and work with a certified insurance agent to fully understand the ins and outs of your policies. This is particularly true if you are switching to a homeowners insurance policy after several years as a renter (or possibly vice versa!)

Renters insurance deals mostly with the items that are in the house, as you are insuring your own permanent property rather than the building you will be staying in for a relatively brief period of time. It’s not a mandatory purchase, though it is a prudent one. If you have renters’ insurance, you will be able to replace any belongings that were lost or damaged due to theft, natural disasters, or other unfortunate circumstances.

For homeowners insurance, however, you’re concerned with a lot more than just the contents of your house—you need to be able to insure for the structure itself! When assessing the cost and coverage of your homeowners insurance, you will need to look into the quality and size of the structure. Depending on the materials with which the home was built and the time frame as well, you will have a different amount of coverage necessary and available. Other internal questions remain as well, including the types of appliances in the house. Larger houses are almost always more expensive to insure, since they will take more to rebuild, and generally contain more items that can also be damaged or lost to circumstance.

Additionally, homeowners insurance is mandatory where renters’ is not. There is so much more at stake that can be lost, and the cost will go far beyond the individual or family who lives in the home. A destroyed or damaged home can affect the property value of an entire community, as well as an empty lot. This is different than renters insurance where you are not the primary individual responsible for the upkeep of a specific property. The idea behind this operates much the same as liability auto insurance, protecting both ourselves and the whole community – either our neighbors or fellow drivers.

For new homeowners looking to find the insurance policy that is the best fit for their particular situation, there are options that can be worked into the mortgage as well. Rather than paying an insurance premium monthly, it can be done through the mortgage lender, but likely result in the loan terms happening on a less than favorable basis.

Here are D’Agostino Insurance Agency, we are eager to provide top-quality New Jersey insurance protection for homeowners and renters alike. If you are considering the best insurance option for your living situation, let us help you through the process. For a free consultation with one of your top-notch agents, give us a phone call today at 609-561-8404 during business hours.

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