People who previously owned homes have found themselves as renters. For some, it’s a choice. The home has been sold, and the previous homeowner needs to rent while looking for another home to purchase. A promotion at work includes a temporary move to another city, so while the spouse and kids remain at home, a rental is also necessary to house that employee. An older couple has decided that the yard work, cleaning and maintenance involved in owning a larger home has gotten to be too much; a move to an apartment just makes sense.
Sadly, for others the move from homeownership to rental is less a result of choice and more a result of conditions. A divorce, a foreclosure or another situation might mean a move to a rental.
Regardless of the reason, anyone going from homeownership to a rental needs to understand some of the differences between homeowners insurance and renters insurance.
While both homeowners and renters insurance cover belongings and liabilities, and, in some cases loss- of- use, there are also differences between the two.
For one thing, renters insurance is less costly. This just makes sense; the maximum amount of payout on even a catastrophic claim is substantially less for renters insurance than for homeowners.
Homeowners insurance also covers the house, garage, and, in some cases, other structures on the property. If a homeowner incurs a loss from a lightning strike, for example, not only is personal property that was damaged as a result covered, but so are repairs to the home. Renters insurance, on the other hand, only covers personal property and injury to another party who may have been hurt during the event. However, the landlord’s insurance will take care of repairs to the property, assuming the necessary insurance is in place.
Don’t make the mistake of assuming your landlord’s insurance will cover your personal property. If the landlord owns the furniture and appliances in the home, they should be covered under the landlord’s policy. However, if you have provided these things, the landlord is under no legal obligation to replace or repair them in the case of theft, natural or man- made disaster. And in no case will your landlord’s insurance cover your clothing, dishes, linens, tools, cleaning supplies, and other personal belongings.