Insurance is an important asset in our world. We insure our lives, our vehicles, even our plane tickets. But insuring our homes is one of the most important and necessary things we can do. Whether you are a renter looking to buy a home or a homeowner considering renting, being fully insured is vital.
Below are the differences between homeowners insurance and renters insurance to ensure you are in the know.
First and foremost, renters insurance is designed for anyone who is renting an apartment, a home, a townhome or a condo. The purpose of renters insurance is to protect all personal property in the event of damage from environmental hazards like water damage, fire and more. Note: in order to receive coverage on all of your personal items, it is vital to keep an up-to-date record of significant belongings.
Though renters insurance is remarkably less expensive than homeowners insurance, it is necessary simply to cover and replace personal belongings. With the average personal property worth coming in at over $30,000 per person, replacing these belongings without insurance can be incredibly burdensome.
Like renters insurance, homeowners insurance covers personal property and the physical structure itself in the event of damage or destruction. Coverage rates are based off of the size and quality of the home (i.e. year it was built, structural materials, appliances etc.) and obtaining an insurance policy is mandatory. Homeowners insurance is required not only to protect you and your home, but also to ensure safety and coverage for your neighbors and the surrounding area.
Another factor that homeowners need to consider when purchasing insurance is the possible existence of the local homeowners association (HOA) and their requirements and regulations on insurance coverage. For homes within an HOA, insurance coverage must meet the needs of the association as well as any added personal coverage. If you’re unsure of what exact policy to purchase discuss the options with your personal insurance agent.
Note on Property Policy
Whether you are a renter or a homeowner, it is vital to protect yourself and your home from earthquakes and floods, both of which are NOT typically covered in any type of property insurance. This is often overlooked in the policy or assumed it is automatically included. The National Flood Insurance Program is the only company though which to purchase flood insurance and several individual companies nation wide offer earthquake protection like Property Casualty Insurers Association of America and California Earthquake Authority.