The Ultimate Guide to Renter's and Homeowner's Insurance
Here's what to know before signing up.
Whether you're currently house hunting or a committed renter, having insurance coverage is essential when dealing with unanticipated life events. While homeowner's and renter's insurance cover different types of property damage, both provide protection and peace of mind when the unforeseen happens. "Home insurance covers the structure of your home along with the contents inside of it," says Andrea Collins, vice president of communications for Hippo. "Renter's insurance only covers the contents of your home."
Having the right insurance coverage for your home or rental (and understanding exactly what that insurance provides) ensures you are aware of your financial responsibility in the event of bad weather, fire, burglaries, or other catastrophes. "Without renter's insurance, you would be on the hook to replace any of your stuff if it were to be stolen, or damaged in a bad storm," explains Ben Moore, insurance expert at NerdWallet. "While your homeowner's insurance provider will pay you money if your home or property is damaged or destroyed in a covered event."
Interested in learning more about homeowner's and renter's insurance coverage? From what types of items aren't covered to tips for picking the right provider, Collins and Moore share their insight ahead.
What Renter's Insurance Covers
Moore says standard renter's insurance policies cover personal belongings that are lost or destroyed due to fire, storms, theft, vandalism, and so on. "It also covers you if someone is injured or has their property destroyed while inside your rental," he says. However, it's important to note that most standard renter's insurance policies don't provide protection for items lost or destroyed in certain natural disasters, such as floods or earthquakes, or due to infestations from mice, bedbugs, or other pests. "It also doesn't cover your roommate's stuff, unless you share a policy," he says.
What Homeowner's Insurance Covers
Traditional homeowner's insurance policies cover both your dwelling and your personal property, as well as additional living expenses and liabilities. "Dwelling coverage financially protects your home structure, including fences, sheds, and detached garages, while personal belonging coverage extends to all the items inside your home, such as electronics, furniture and jewelry." Collins explains. "Additional living expenses coverage pays for extra living costs if your house is damaged and becomes uninhabitable, and liability coverage offers financial and legal protection should someone get injured in your home."
Much like renter's insurance, Collins warns that some home insurance policies may not cover all the potential risks your home could face. "If you live in an area prone to earthquakes, floods and sewer backups, ask your insurer where there might be potential gaps in your policy as certain 'perils' require add-ons or a separate policy," she advises.
How to Get Renter's Insurance
According to Moore, buying renter's insurance is easy and quick compared to buying other policies. "Calculate how much stuff you own to determine how much coverage you need, and then research insurers online," he advises. "Most major insurers offer renter's insurance, or you can contact an insurance agent—just make sure you get quotes from several companies so you know you're getting the best rate possible."
When searching for a renter's insurance policy, Collins says online insurance marketplaces, such as Assurance or PolicyGenius, can help match your needs with a renter's policy. "To make sure your expectations stack up, consumer review sites like Better Business Bureau provide real-time feedback from customers about their experience with a provider," she says.
How to Get Homeowner's Insurance
Whether your offer just got accepted on your first home or you're looking to update your current home's policy to better fit your needs, Collins says understanding the ins and outs of how to buy homeowner's insurance is key to ensuring your home is properly protected. "Take note of your inventory, including any prized possessions that simply can't be replaced," she says. "Before buying a home insurance policy, shop around to compare quotes and select the coverage best suited for your needs."
Collins also recommends talking to potential insurance providers about any discounts that you might qualify for that can lower the cost of your premium. "Some insurance companies are able to cut premium costs for things that lower your risk profile, like installing a home security system," she says. "While certain companies (like Hippo) offer discounts if you install smart home devices."
Updating Your Home Inventory List Every Year
Once you've settled on a home or renter's insurance policy, Moore says it's a good idea to complete an annual inventory of all your belongings to ensure that everything is still covered. "This way you can make sure your renter's or homeowner's policy covers any new stuff or changes you've made," he says. "It can be as easy as walking around your home and recording each room on your phone."