Many people choose to rent apartments or homes for a variety of reasons. Some like not having to take care of maintenance issues that crop up. Other people prefer the cheaper rental rates which come from living in an apartment. Homeowners seek out homes because they prefer to own the place where they live, in addition to being able to have more space than an apartment allows.
Whether you’re a renter or a homeowner, you’ll need insurance for your residence. Before deciding to move on either front, it’s best to find out what is different about each type of insurance. For today, we’ll focus on what the differences are between renters and homeowners insurance.
Coverage
You’re at a point where you’re tired of living the rental life. You don’t want to have to keep running to a landlord when something happens with your apartment or home. In some cases, your landlord won’t be there to immediately tackle the problem you’re dealing with, which causes the issue to grow. Maybe you need a plumber to head out and deal with a leak. Or, say, there’s a noxious mildew odor that is circulating around your house. In both cases, you need an issue tackled quickly and efficiently. If you want to ensure that you have better control over having such matters dealt with, you’ll have to become a homeowner.
When you decide to make the move from rental to purchased home, you’re going to update the type of insurance you’re paying. As you do your home insurance compare, you’ll begin to notice that there are differences in renters insurance and homeowners insurance. The first difference which becomes apparent is the coverages provided by each insurance. With a homeowners policy versus a rental policy, home insurance policies include dwelling insurance. Rental policies do not. There are also five coverage types included under a homeowners policy: dwelling, personal property, personal liability, additional living expenses, and medical payments. Renters insurance has all four of these except dwelling coverage.
How these coverages are applied is also a point of difference between the two types of insurance. For instance, maybe you encounter the same problem of mildew odors in your house due to a hot water leak. You want to get a plumber out to your house and need to see if your insurance might cover this visit. When you were renting, such repairs were included underneath you’re leasing agreement. You were paying for this service through your rent. When you have homeowners insurance, these hot water pipe repairs, and treatment of the mildew bad smells, would be taken care of with that type of insurance.
Cost
Another difference between home and rental insurance will be their cost. They will range in price due to factors like different types of coverages, such as liability coverage, and personal property coverage. In addition to that, more importance is applied to a homeowners policy versus a rental policy for apartment rentals.
Home insurance costs approximately around $1,200 a year, while renters insurance costs about $180 annually. Another reason why homeowners insurance tends to be more than renters insurance is that a home policy has dwelling coverage. Many homeowners are asked to have enough dwelling coverage to cover their homes in the case of major damage. This is not needed as much for someone who rents since they don’t own their property. They are just a tenant.
Factors
When an insurance company takes your insurance application under consideration, they look at a variety of factors to determine the insurance price. Some of these factors are similar when an insurance agent is considering selling home and renters insurance to a person. These similar factors involve a person’s credit score, claims history, deductible amount, the value of personal property, and discounts. For instance, maybe you had to make several insurance claims about bad smells in your home which were associated with mildew or mold damage. These claims would be factored into how much you have to pay for renters or homeowners insurance.
When it comes to homeowners insurance, though, there are factors for pricing which are considered that aren’t considered for renters insurance. These factors include the age of your home, your home’s building materials, the size of your home, what type of roof your home has, and the history of claims made against past homeowners. These factors are some of many differences between both rental and home insurance.
