When it comes to property insurance, the two most basic is the homeowner’s insurance and the renter’s insurance. While you may confuse these two, they both serve a different purpose. The homeowner’s insurance protects the physical structure of the homeowner’s property. On the other hand, renter’s insurance only protects the personal belongings of the renter.
Therefore, as a tenant, your personal belongings such as furniture, clothes, electronics, etc. anything you call it your own will not be covered by the landlord’s homeowner insurance.
Mandatory or Not?
One thing both homeowner’s insurance and the renter’s insurance have in common is they are not mandatory at all. By all means, the two aren’t required by law on federal, state, or local levels. However, you may have to get a homeowner’s insurance policy before you get a mortgage. While most lenders do not require this at all, some may do. So put that into consideration when purchasing.
The situation is a little bit complicated with renter’s insurance. While it isn’t required at all and it is up to the renter to get a renter’s insurance policy, some apartment complexes may require tenants to have renter’s insurance before they moving in. This is mostly because of safety concerns. Think of it this way, assume the guy next door left cooking unattended. Without a renter’s insurance, any damage done to your personal belongings will be uncovered and you will have to replace everything. This alone makes the renter’s insurance such a worthy investment for a small price.
Both homeowner’s insurance and the renter’s insurance monthly premiums are quite cheap. A typical homeowner’s insurance will cost about $40 for $100,000 home value. The renter’s insurance will cost about the same for a $40,000 coverage with up to $1 million in liability coverage. Personal liability coverage also included in most homeowner’s insurance policies. It is to cover medical and legal fees in case someone gets injured in your home and decides to sue you and for similar events.
Overall, both will not cost anything significant on a monthly basis. Since the coverage is too great to match the cost, we strongly encourage you to get coverage whether you’re a renter or a homeowner.