Renters Insurance vs. Content Insurance

By Dave Faulkner

If you rent the home in which you currently live, there are very different requirements for home insurance than those you would have if you were a homeowner. Most landlords actually stipulate that you must have home insurance whilst residing in their property in your lease agreement. This offers both you and your landlord a degree of protection but you have to actually take a policy out in order to validate your lease. Your landlord will take care of the buildings insurance so you will only be required to insure your contents. However, you have two types of insurance to choose between – home renters insurance and home contents insurance.

There are very distinct differences between the home renters insurance and home contents insurance and researching both forms will actually enable you to choose the best type of policy for you. The basic features of each individual type of policy are outlined below so you see the main differences for yourself.

HOME RENTERS INSURANCE

1. Home renters insurance only covers the person named on the policy. You can actually have a joint policy set up so that it covers your roommate or partner although this will raise your premiums. If you choose not to do this then it will only cover your personal property.

2. When taking out your home renters policy, you have two options to choose from as to what compensation you will receive if you claim. You can choose actual cash value, which is based on how much each item is worth at the time of damage being sustained, or replacement value which will pay out up to the amount your are insured for so you can buy a replacement.

3. Some elements of home renters cover are limited. For example, certain policies will only pay out a certain sum for items stolen but will pay out another sum for damaged property. Renters insurance is often characterized by different limits within the one policy.

HOME CONTENTS INSURANCE

1. Home contents insurance actually covers all property contained within and owned by the occupants of the rented house. Home contents insurance covers the address rather than the individual.

2. Most home contents insurance policies are for replacement value costs when making a claim. As a rule, home contents insurance policies do not offer actual cash value because this can often devalue certain items. This often defeats the point of insurance so most individuals just aren’t given the option.

3. Home contents insurance is often set at a certain payout limit per year. They will not pay claims over and above that limit, but all proven claims under that limit will be paid regardless of the reason for the claim. There are rarely caps on property lost or stolen. Only extra options that you can have tagged onto your policy actually have different limits.

You can also find more information on Home Insurance Quote Online and Home Owner Flood Insurance.Homeowners-insurance-help.com is a comprehensive resource to get help about home insurance.