Homeowners Insurance vs Renters Insurance

Why This Guide Matters

Whether you own your home or rent an apartment, protecting what matters most is non-negotiable. But too often, people assume homeowners insurance and renters insurance are basically the same — or worse, that one is optional.

In this guide, we break down the real differences, explain when you might need both, and share expert tips so you can avoid costly surprises.

What Is Homeowners Insurance?

Homeowners insurance protects both the structure and the contents of your home. It typically includes:

• Coverage for the physical building (and other structures like garages or sheds)
• Coverage for personal belongings inside the home
• Liability protection if someone gets hurt on your property
• Living expenses if you’re displaced after a covered disaster (like a fire or storm)

It’s usually required by mortgage lenders — and even if it weren’t, skipping it would be financially risky.

What Is Renters Insurance?

Renters insurance covers the personal belongings of tenants — not the building itself. It generally includes:

• Coverage for your personal items (furniture, clothes, electronics)
• Liability protection if you accidentally damage the rental or someone gets injured inside
• Additional living expenses if you’re forced to move temporarily due to damage

While landlords carry homeowners or landlord insurance to protect the building, that coverage does not protect your personal stuff as a renter.

Top 5 Differences Between Homeowners and Renters Insurance

Structural Coverage

• Homeowners: Covers the home and detached structures.
• Renters: Covers only personal belongings; the landlord insures the building.

Cost

• Homeowners insurance is significantly more expensive, averaging $1,500–$2,000/year.
• Renters insurance is very affordable, averaging $10–$20/month.

Liability
Both cover liability — but renters insurance only covers accidents inside your unit, not issues tied to the building.

Requirements
Mortgage lenders require homeowners insurance. Landlords may require renters insurance, but many don’t (though they should).

Who’s Responsible in a Disaster?
After a fire or flood, the homeowner or landlord handles the structure; the renter is responsible for replacing personal belongings.

Common Myths (Debunked)

My landlord’s insurance covers my stuff.
No — it only covers the building, not your personal belongings.

Renters insurance is just for theft.
Wrong — it also covers fire, water damage (non-flood), liability, and additional living expenses.

I don’t own anything valuable.
Even replacing clothes, electronics, and kitchenware adds up fast — often to $10,000 or more.

When Do the Two Work Together?

In apartment or condo buildings, homeowners and renters insurance often work side by side. For example:

• A landlord’s policy covers rebuilding after a fire.
• A renter’s policy covers replacing clothes and furniture inside the burned unit.
• Liability coverage on both sides helps determine responsibility if the renter caused the fire.

Tips for Choosing the Right Policy

Homeowners:

• Make sure your coverage reflects the full rebuild cost, not just market value.
• Update your policy if you renovate or add square footage.
• Bundle home and auto insurance for potential savings.

Renters:

• Don’t skip insurance just because it’s optional.
• Choose a policy that covers replacement value, not just cash value.
• Ask about discounts for smoke detectors, alarms, or bundling with auto insurance.

How ServiceMaster Restoration By Simons Helps

When disaster strikes — whether you’re a homeowner or renter — navigating insurance claims can feel overwhelming. That’s where we come in.

With over 40 years of local experience in Chicago, Lake County, Cook County, DuPage County, and the North Shore, ServiceMaster Restoration By Simons helps residents recover after:
- Water damage
- Fire and smoke damage
- Mold infestations
- Specialty cleaning needs

We work directly with your insurance company to document damage, speed up approvals, and help you get back on your feet faster.

FAQ: Homeowners and Renters Insurance

Q: Do I need renters insurance if my landlord has coverage?
A: Yes — their policy only covers the building, not your belongings.

Q: Does renters insurance cover flood damage?
A: No — floods typically require separate flood insurance.

Q: Can homeowners insurance cover mold removal?
A: Sometimes, if the mold is due to a covered event (like water damage from a burst pipe).

About ServiceMaster Restoration By Simons

ServiceMaster Restoration By Simons is Chicago’s trusted name for disaster restoration. We’re a proud MBE/WBE-certified firm, led by IICRC Master Fire & Water Restorer Sam Simon and CEO Nasutsa Mabwa. We serve residential and commercial clients across Chicago, Oak Park, River Forest, the North Shore, Lake County, and DuPage County.

Our services include:

• Water Damage Restoration
• Fire & Smoke Damage Cleanup
• Mold Remediation
• Hoarder & Specialty Cleaning

We’re also the authors of RESTORE: A Complete Guide to Protecting Your Home As Your Most Valuable Asset — your must-have handbook for disaster preparedness.