There’s some confusion about the differences between renters insurance and landlord insurance, but the concept is straightforward: If you own the rental property, get landlord insurance, but if you renting the property from someone else, you need renters insurance. Both are important.
Some renters may feel they’re protected because, after all, the landlord is responsible for the property. On the other hand, the property owner might believe any possible damages are already covered by homeowners insurance. But renters and landlord insurance policies don’t typically overlap, and landlord insurance is separate from homeowners coverage.
What Renters Insurance Covers
Renters insurance, which is inexpensive when compared to landlords insurance, covers damage to your personal property in the event the home, room or apartment you are renting is damaged by something like a fire, explosion, severe winds, hail storms, bad water leaks or vandalism. Renters insurance can also provide coverage for theft of your personal items.
Personal property that is covered includes valuables such as:
- Computer hardware & software
Renters insurance can also cover your costs for renting elsewhere while the property you’ve been living in is being repaired. The policy also provides some liability insurance in case someone is hurt on the property while you’re living there.
Note that if you operate a business out of your rental home you might need to buy commercial insurance to cover your business interests as well.
What Landlord Insurance Covers
Landlord insurance only applies to residential rental property, not commercial. Owners purchase landlord insurance to protect their building, fixtures and furnishings they own on the property.
Types of damages covered include:
- Broken water pipes & water leakage
- Fire and/or smoke
- Snow, hail and wind
- Vehicle and aircraft impact
Landlord insurance, which can include liability coverage, doesn’t always cover damage from floods and earthquakes, so additional coverage will need to be purchased if the property is in a high-risk area. If hurricanes are known to occur in the area, additional riders are probably necessary as not all basic policies cover wind damage.
Whether you’re a renter or landlord, learn more about these policies before you buy. You might want to also read these EInsurance articles: