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The Difference Between Renters and Homeowners Insurance

Cutout of Family Outside On Lomita Park GrassAccording to the 2010 Census, 53.7% of housing units in Lomita, CA are occupied by renters. This explains why so many people inthe Lomita area are curious about renters insurance and have many questions about it. Is it the same as homeowners insurance, but for tenants instead of homeowners? How necessary is it? Is it ever required, like homeowners insurance often is? We have answers to these questions and a discussion on the differences below.

Isn’t Renters Insurance Just Homeowners Insurance for Tenants?

While it seems logical that renters insurance is simply homeowners insurance for tenants, they actually have some key differences. Because rental property is owned by one person or a group and occupied by another person or group of people, there can be layers of home insurance for one property.

Rental Property Insurance VS Homeowners Insurance

As the owner of a home, your homeowners insurance covers the home as well as what’s inside the home. In a rental property, the dwelling must be insured by the owner, but the renter is responsible for insuring everything inside. Let’s take a closer look at homeowners insurance and renters insurance to fully understand the difference.

Homeowners Insurance Explained

Homeowners insurance is a policy that the owner of a home takes out to protect their home in the event of unforeseen accidents, disasters, losses, etc. While a homeowner is not required to purchase homeowners insurance by virtue of being a homeowner, they are required to insure their home if they have a mortgage. This is because the lender is financially responsible for your home until you pay off your mortgage. Standard insurance has to cover the cost of the repairs to the home in the event of a loss up to the limits listed on the policy, and sometimes the cost of the items inside the home as well (depending on the specific policy).

Renters Insurance Explained

If you do not own the home you live in but you want to make sure that your belongings are covered in the event of total loss, you would need renters insurance. Your landlord’s property insurance will not cover the cost of your things and you will not get reimbursed for any losses if you do not have renters insurance.

Do You Need Renters Insurance?

Deciding if you need renters insurance can be tricky. While there are some large property management companies that require their renters to get renters insurance, it is usually up to the individual to determine whether or not they want to invest in protecting their things. A good first step to making this decision is to create an inventory of everything you own and come up with a number. Then, if you do decide to invest, you will already have the number you need to determine how much coverage is necessary.

Understanding Personal Insurance

Both renters insurance and homeowners insurance fall under the title of personal insurance. It can be difficult to figure out the difference between the different types of personal insurance and to decide which ones are right for you. Contact us to get any of your questions answered or to get a quote for personal insurance in Lomita or the surrounding areas.


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