Renters Insurance vs. Landlord Insurance: Which One Do You Need? 

What if you did not know how to properly protect your most important investments and belongings? 

If you own and rent out properties or if you are an actual renter in one of those properties, do you need renters insurance or landlord insurance? After all, each one offers a unique set of protections – it may just be hard to decipher which one applies to you. 

Which kind of coverage do you need? What offers the right protection against things like personal property damage and which one covers the actual property itself? Keep reading to discover the answers to all these questions that can save you plenty of time and money when — not if — disaster strikes. 

What Is Renters Insurance? 

Rental property insurance is designed for renters rather than landlords. That is because it offers certain protections to tenants. For example, a typical policy will protect personal property in the event of damage or theft. 

Additionally, these policies offer liability protection to tenants. That way, should a visitor get injured and hold the tenant legally liable, relevant medical and legal bills will be covered up to the limit (your carrier can help you figure out how much renters insurance you need). Finally, this plan offers loss-of-use coverage that will pay for temporary living costs should the home become unlivable. 

Such policies may be optional. But at the discretion of the landlord, renters insurance may be required for tenants. 

Coverage for Personal Belongings 

This rental property policy protects the personal belongings in the home and even the personal vehicle of the tenant. This offers peace of mind to those worried about their items getting damaged or stolen. 

Liability Protection for Renters 

Everything from toys on the stairs to an aggressive dog at the dog park could cause injuries. An injured person may hold you liable. In those situations, this tenant insurance will pay for the medical bills of the injured party and, as needed, the legal bills of the tenant. 

What Is Landlord Insurance? 

As the name implies, landlord coverage is designed for those who actually own the property in question. Chiefly, this policy protects the building itself from damage, making it that much easier to protect your investment. 

These policies also provide other protections for the property owner, including landlord liability. Thanks to this, as an owner, you do not have to worry about a single lawsuit potentially destroying your real estate investment. 

Property and Structure Coverage 

Landlord coverage offers property damage protection to owners. This includes covering damage to the dwelling itself, the systems, such as the HVAC, and personal belongings you have provided, such as appliances or furniture, that may get damaged or stolen. 

Liability Coverage for Rental Property 

If a tenant gets injured, they may end up blaming the property owner. Fortunately, this policy provides landlord liability protection that will pay for the medical bills of the injured party and, as needed, the legal bills of the landlord. 

Key Differences Between Renters and Landlord Insurance 

Still figuring out the benefits of renters insurance vs. landlord insurance? To decide on which of the policies is best for you, it is important to understand their key differences. 

For example, you need to know who each type of policy was designed for and what each one covers. With these differences in mind, you can make a coverage decision that protects your property as well as your bottom line. 

Who Needs Each Type of Insurance 

It is easy enough to remember who needs renters insurance vs. landlord insurance. The answer is right there in the name: a rental policy is a form of tenant protection for those who rent. A landlord policy is designed to protect property owners from unexpected catastrophes that may happen to the property. In fact, that is the biggest benefit of landlord protection. 

What Each Policy Covers 

Both rental and landlord policies protect personal belongings, and each offers liability coverage. Key differences include that only the landlord policy will protect against property damage to the dwelling itself. Also, while each policy offers use-of-loss coverage, it works in slightly different ways. Should the home become unlivable, a rental policy pays for tenants to live somewhere else. In the same scenario, a landlord policy will cover any lost revenue experienced by the property owner. 

Why It Is Important to Know the Difference 

You can see why many people do not know if they need renters insurance vs. landlord insurance. After all, there is significant overlap in what each policy covers. This may leave you with a simple question: Why is it important to know the difference, really? 

The short answer is that this knowledge can help you save time and money. By getting the right policy, you can avoid an annoying coverage gap while making sure all your legal and financial responsibilities are covered. 

Avoiding Coverage Gaps 

Unfortunately, no policy covers every scenario. By studying your policy’s fine print, you can determine if there are any coverage gaps about which you may be worried. For example, once a tenant realizes that landlord coverage does not protect tenant belongings, they may want to seek out a rental policy in order to properly protect their property. 

Legal and Financial Responsibilities 

In most cases, landlords are not legally required to take out special coverage on their properties. However, if those properties are still under mortgage, the bank may require a policy on the building. Even when it is not required, though, landlords are encouraged to get such a plan because it offers legal and financial protection (remember, legal costs can ruin your nest egg if you are sued) as well as peace of mind. 

Get the Right Protection Whether You Rent or Own 

Now you know all about renters insurance vs. landlord insurance. This includes how each policy works, who they are made for, and why it is important. But do you know where you can find a carrier who will always go the extra mile to protect you? 

At InsureOne, we specialize in protecting landlords and tenants alike. When you are ready for the peace of mind you deserve, come get a quote online. Of course, you can also pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to come find an InsureOne office near you.