Renters insurance covers your belongings and liability but not the building. Homeowners insurance covers the building too, because the owner is responsible for it. That’s why renters insurance costs a fraction of homeowners insurance.
Renters vs. homeowners insurance at a glance
| Renters (HO-4) | Homeowners (HO-3) | Condo (HO-6) | |
|---|---|---|---|
| Who it’s for | Tenants | Owners of a house | Owners of a condo unit |
| The structure | Not covered | Covered | Interior walls and fixtures; the association insures the rest |
| Your belongings | Covered | Covered | Covered |
| Liability | Covered | Covered | Covered |
| Extra living costs if displaced | Covered | Covered | Covered |
| Floods and earthquakes | Excluded | Excluded | Excluded |
The “HO” codes are standard policy forms used across the insurance industry. Individual insurers may add or change coverage.
Why renters insurance is so much cheaper
Rebuilding a house after a fire can cost hundreds of thousands of dollars. Replacing a renter’s belongings usually costs much less. The average renters policy was about $171 a year in 2022, according to NAIC data. See costs by state.
How the coverage is similar
Both cover your belongings for the same types of events, such as fire, theft and burst pipes, and both include personal liability and loss-of-use coverage. If you move from renting to owning, the parts of your policy that protect your stuff and your liability will feel familiar.
Special situations
- Renting out a home you own: you need a landlord (dwelling) policy, not homeowners or renters insurance.
- Renting a room from a homeowner: the owner’s homeowners policy generally doesn’t cover your belongings; you need your own renters policy.
- Renting a condo: the condo owner carries an HO-6 or landlord policy; you still need renters insurance for your belongings and liability.
- College students: a parent’s homeowners policy may extend to a student in a dorm. Here’s how that works.
New to this? Start with What is renters insurance?
This site offers general information, not insurance or legal advice. Coverage, prices and rules vary by insurer, policy and state, so always read your own policy and ask your insurer or agent about your situation.