What’s The Difference Between Renters Insurance And Landlord Insurance?

Renters insurance and landlord insurance are often spoken about as two versions of the same thing. They are not. They cover different property, answer to different people, and respond in different situations. When you turn a house into a rental property, think of the kind of insurance that helps protect your place. Read on to learn about the difference between renters’ and landlord insurance.

Tenants have rights that sit outside either policy. California implies a non-waivable warranty of habitability into every residential lease, which places the duty to keep the unit livable on the owner rather than on the renter. How that duty interacts with landlord coverage is worth reading alongside this.

What is landlord insurance?

Landlord insurance is a policy taken out by the landlord to cover the property itself. If the building is damaged by a cause the form covers, such as fire or a burst supply line, the landlord policy is what responds. Earthquake and flood sit outside it and need separate coverage. The policy could also cover some rental contents depending on the coverage type. 

A landlord insurance policy includes some type of liability coverage for the landlord. It would act to protect the landlord if they were to be sued because of an incident at the property. A tenant can bring a claim regardless; the liability section is what funds the defense and any damages. Here are some of the coverage the landlord insurance includes:

• Dwelling
• Detached structures
• Liability protection
• Vandalism
• Burglary
• Ordinance or law, where added, which addresses the cost of rebuilding to current code

What is renters insurance?

A renters’ insurance policy covers specific aspects of a tenant’s living situation. Since tenants do not own the building, this insurance policy cannot cover the property. 

Instead, the renter’s insurance covers the cost of the payment you need to stay somewhere if the property is uninhabitable. The policies include liability and defense coverage, which protects you as an individual in case you get sued for an incident at the rental property. Renter insurance coverage includes:

• Contents
• Loss of use
• Personal liability
• Building additions
• Medical payments
• Credit card coverage

How the two differ

Landlord and renter insurance differ significantly. To give you an idea, here are the main difference between these two types of insurance:

1. Cost
   The cost of landlord and renters insurance differs depending on several factors. But generally, renters insurance is less expensive because it doesn’t completely cover the building compared to landlord insurance. 
2. Coverage
   In terms of coverage, it’s easy to remember the difference between the two. Renters insurance covers what’s inside the property, while landlord insurance covers the whole. 
3. Liability
   Both carry liability, but they answer for different people. The landlord policy defends the owner against claims arising from the property. The renters policy defends the tenant, and it follows them rather than the address.

Specific questions tenants ask most often are answered in common renters insurance questions.

Why renters skip it, and what that costs

Many tenants assume the landlord’s policy will respond to their losses. It will not. Landlord coverage protects the building and the landlord’s own liability, and it stops there. Anything belonging to the tenant sits outside it.

Replacing personal property costs more than most renters estimate once the total is added up rather than guessed at. Loss of use is the other half, paying additional living expenses if the unit becomes uninhabitable while it is repaired. Both limits sit on the declarations page.

Liability is the part renters overlook most often. It is not confined to the unit, so an incident away from home can still fall to the policy.

One specific gap is worth knowing. Personal property stolen from a car is generally a claim against the renters insurance policy rather than the auto policy, because auto covers the vehicle and what is attached to it, not the belongings inside.

Protect your property and tenants with the right insurance

You need different insurance policies if you own a rental property or are a tenant. To protect yourself from any cost for damages, it’s essential to understand the difference between landlord and renter insurance. 

At Schneiderman Insurance Agency, we walk clients through their options and help them decide what fits. To learn more about how we can help you, please contact our agency at (818) 322-4744 or request a quote online.

Disclaimer

This article is provided by Schneiderman Insurance Agency for general informational purposes only. It is not legal, tax, financial, claims, or coverage advice. We are licensed insurance professionals, not attorneys, accountants, or financial advisors, and nothing here should be relied on as a substitute for advice from a qualified professional in those fields. This content is general in nature and is not a review of, or a recommendation for, any individual reader’s specific insurance needs, policies, or circumstances. Insurance coverage depends entirely on the specific terms, conditions, endorsements, exclusions, limits, underwriting eligibility, carrier, and facts of each situation, and the actual policy language always controls. We do not guarantee any coverage, pricing, eligibility, underwriting approval, or claim outcome. Reading this article does not create an agent-client relationship. To understand how these issues apply to your situation, please review your own policy and speak with a licensed insurance professional, and consult legal, tax, or financial advisors where appropriate.