Renters insurance vs. landlords insurance: What does each policy cover?

What's the difference between the two types, and who is responsible for claims?

By Susan Meyer

Updated July 11, 2024

Reviewed By Ross Martin

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What is the difference?
Cost
Scenarios
How much coverage is enough?
Tips for landlords
Tips for renters
FAQs

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Who is responsible for a rental property?

This answer depends on the specifics of the property; namely, the inside contents versus the structure itself. If you rent your home, it frees you up from worrying about some things, like maintaining the house. But there are still some concerns. After all, while you may not have control over the building you reside in, all your most important possessions are likely there.

If you're a renter, you might wonder whether a renter's policy is worth it. Just about half of renters in the U.S. have a renters insurance policy (55%), yet 75% of those renters have a policy because they're required to.^[1] Some landlords will write it into their lease to require a renters policy, but some leave the decision up to you. You may think that most of the upkeep and damages to a rented apartment or house will fall on your landlord, and in some cases, it will. But there are certain damages you could be responsible for, and it's important to be aware of your renter's policy coverages.

Let's look at the coverage provided by both landlord and renter policies, the specific differences to be aware of, and some situations you might find yourself in. In short, a landlord policy and a renters policy are both important for a rental property.

What’s the difference between landlord insurance and renters insurance?

If you are renting out a home you own, you will need a landlord insurance policy to protect against covered perils similar to home insurance for your primary residence. If you are a renter, you need renters insurance to protect your personal property.

Here are what each of these policies cover:

Landlord insurance:

Protection of the dwelling (damage to the structure of the home or property)
Protection of personal property (furniture or appliances that come with the unit)
Loss of use coverage (if the property becomes temporarily unlivable and tenants are forced to evacuate, this covers your lost rental revenue)
Liability protection (if a tenant or guest is injured on the property and the landlord is held liable)^[2]

Renters insurance:

Protection of personal property (all belongings within the renter's home and sometimes vehicle)
Loss of use coverage (covers temporary living expenses if you’re forced to evacuate)
Personal liability of medical bills (if someone is injured at the rental)^[3]

How much does coverage cost?

Renters insurance cost

Like every other type of insurance, the cost of coverage depends on many factors. But generally speaking, renters insurance is usually fairly cheap (compared to homeowners, for example). Most renters can find basic coverage for as little as $10-$15 per month. There are endorsements you might want to consider adding (such as additional jewelry coverage) if you own certain expensive items you want to ensure are properly covered. But for the most part, renter's insurance is easy to obtain and the peace of mind might be worth the cost.^[4]

Renters Pay up to 11% More Than Homeowners for Car Insurance

Landlord insurance cost

Landlord insurance usually costs about 15-20% more than homeowner coverage. This is mostly because of the additional risk you take by having tenants (and their guests) in your home. A tenant is unlikely to take the same level of care with your home as you would if you lived there, which can lead to serious issues being overlooked or ignored.^[5]

Homeowners coverage rates will differ based on multiple factors, such as where the home is located and the age of the property.

Whose insurance pays for the damage?

If you’re on the fence about purchasing renter's insurance, consider some of the following examples:

Roof leaks
Dog bites
Robbery
Flood

Let's take a look at which of these fairly common situations your renter's policy would cover, versus those your landlord would be responsible for through their coverage.

Roof leaks

What if there’s a leak in the roof?

A big storm led to some roof damage to your rental. Whose insurance will cover it?

The landlord’s insurance policy should cover the repair of the roof and any water damage done inside to the floors, structure or furnishings belonging to the landlord. If the damage is enough that you have to leave while repairs are made, they will also cover loss of revenue for the period you aren't paying rent.

But they won’t cover your belongings. The renters policy takes over to cover damages to your stuff. If you have to leave while repairs are made, it can also pay for your alternative lodging.

Dog bites

What if your (the renter's) dog bites someone while on the rental property?

Your (otherwise lovely) dog just bit someone badly enough that they require medical care. Who is paying that bill: your renters insurance or your landlord’s policy?

This one is more complicated. Since it’s your dog that bit someone, you and your renter’s insurance are usually the first to be held liable. This is because you, the occupier, should have awareness of the danger level presented by your dog, and are thus more responsible for injuries it inflicts.

That said, your landlord also has a responsibility to keep their property safe. If they become aware that a dog is dangerous and fail to take action to have it removed from the property, they can also be held liable. This is why many landlords have stipulations about what pets or particular breeds can live in their units.

Theft

What if someone robs your place?

Someone breaks a window, sneaks into your rented home and steals your TV, computer and some jewelry. Whose insurance is paying?

The landlord’s policy could pay for the broken window and any other damage to the property from the robbers. If the thieves stole anything belonging to the landlord (say, large appliances like an oven or furniture if it was a furnished unit) those could also be covered.

The rental policy would cover your belongings that were taken. It’s important to keep a record of your belongings to expedite the claims process.

Flooding

What if there’s a flood?

Unprecedented rain leads to a river overflowing and your first-floor apartment is completely flooded. Whose insurance will take this one?

Unfortunately, flood damage is usually not a covered peril on either landlord insurance or renters insurance policies. If you live in a flood-prone area, you will usually need to carry a separate policy specifically for flooding.

How much coverage should renters and landlords each have?

How much landlord insurance do I need for my rental property?

How much insurance you need for a property you own differs by person, property and insurance company. We highly recommend shopping around and having a candid discussion with your insurance agent about the property so you can make an educated decision. Standard landlord insurance might be fine, but you might want to consider some extra coverage for additional peace of mind, depending on your situation.

Possible endorsements or extra coverage options:

Water/sewer backup
Vandalism
Burglary
Loss of rent (or loss of use)
Equipment breakdown
Building codes

How much renter's insurance coverage should I have?

This is unique to every renter and depends on how much (and what type) of personal property you own. If you're a minimalist or tend to stick with secondhand furniture, you probably won't need as much coverage as someone with lots of valuable items. We suggest completing a home inventory to evaluate how much your property is worth, because it may surprise you.

For example, your clothes and everyday basics may not add up to that much, but if you consider tech gadgets (anything from computers to VR headsets to smartwatches) high-end sporting goods (a top-of-the-line bicycle), or expensive jewelry (the antique watch you inherited from your uncle), you'll need a hefty sum if you ever need to replace these items.

Tips for landlords

Every rental home is different, and there isn't a one-size-fits-all policy. But here are a few things to think about as you start shopping for a landlord policy:

Landlord insurance is tax-deductible^[6]
Evaluate what it would actually cost if you had to rebuild from scratch
Decide if you're going to require renters insurance
The home's location and it's likelihood of natural disaster
Potentially add safety features to help limit risk (and lower rates)

Will basic landlord coverage work for a furnished rental?

"My husband and I own both a furnished and an unfurnished rental property; the unfurnished home has a standard landlord policy, but we've made some changes to the policy for the furnished home. We have that home's belongings covered at their replacement cost, rather than actual cash value. This means we pay a little more for our policy, but if something destroys a fully furnished and decorated home, I'll be better prepared to replace all the beds, dressers, and little details we've added.

We also choose to carry an umbrella policy as well as high liability coverage, for both rentals, just to have additional peace of mind. If someone were to get hurt at either property I want to know that our investments are protected and we will be able to handle the situation financially."

-Beth Swanson, Insurance writer at The Zebra

Tips for renters

Here are a few questions to consider as you start to shop around for renters insurance:

Does having a pet affect your rate?
Is personal liability included?
Will safety equipment (burglar alarm, sprinkler system, deadbolt, etc.) save you money?
Is earthquake or flood damage covered?
Is your coverage only valid at home (as opposed to items in your car, for example)?
If you have a claim how does the reimbursement process work?^[7]

Wrapping up

At the end of the day, the decision to get renters insurance comes down to your budget and your risk tolerance. If you can swing it though, renters insurance is a sound financial decision. The landlord's policy is there to protect them and their property, not you and yours. If the unthinkable happens, the peace of mind of knowing you won't have to replace all your possessions can be money well spent.

If you're considering a renter's policy, call our agency a call at 1-855-493-9138. Our friendly licensed agents can help you compare quotes and provide the best options for your needs.

Or, click the link below to get a quote from The Zebra's trusted partner, Lemonade. The company offers competitive renter's insurance rates and discounts for bundling, paid-in-full, and more.

Need a Renters Insurance Quote?

FAQs

Will landlord insurance cover tenant damage to the home?

Intentional damage or wear-and-tear are not typically covered by insurance. Accidents caused by a tenant would likely be covered as long as the situation isn't excluded from your policy. It's always important to check your coverage and if you aren't sure about a possible exclusion or the wording in your policy, ask your insurer to clarify.

What is the difference between landlord and home insurance?

A landlord policy covers a home that you own, but don't live in. A homeowners policy covers the home that you own and reside in. When a home is rented out, different factors must be taken into consideration, so it's important to notify your insurance company if you decide to rent out a home you no longer live in.

What is the difference between renters and home insurance?

When you're a renter, you are responsible for your belongings in the home, but not the building itself. As a homeowner living in the property yourself, you'd need to have insurance for the dwelling as well as your contents. Both renters and homeowners will also want to have personal liability as a part of their coverage, but the amount you need as a renter may differ from the amount you'd have as a homeowner.

Do you need landlord insurance if you're only renting a room?

If you're "househacking" by renting out part of your home, you'll want to discuss the situation with your insurer to make sure you're properly covered. The type of coverage you'll need will depend on a few things, and there might be an endorsement to add to your current coverage without getting a whole new policy. One factor your insurer will consider, for example, is having several short-term guests versus having one long-term roommate. Your liability risk increases when you have a tenant, as well, so you may want to adjust your liability coverage. It may not feel significant if you're renting a room to a friend, but it's in your best interest to notify your homeowners insurance company so you're prepared in case of a claim.

Sources

2022 Renters insurance industry report. SafeHome
What does landlord insurance cover (and not cover)? Stessa
Understanding home and renters insurance. Office of Financial Readiness
Average renters insurance cost for 2024. USA Today
Renting our your home? Get landlord insurance. HouseLogic
Residential Rental Property: Publication 527. IRS
What You Need to Know About Renters Insurance. Government of the District of Columbia