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The Key Differences Between Homeowner’s and Renter’s Insurance

The Key Differences Between Homeowner’s and Renter’s Insurance

Dec 28, 2022

Accidents can occur no matter where you choose to live, which means that insurance is always an essential part of life. However, when it comes to understanding the different types of insurance and which policy best fits your needs, you may find yourself a bit confused. Fortunately, there are so many wonderful resources out there, such as this article, that can help you understand what policies you should and should not consider for your home. 

Today, we are going to answer a very popular question, what is the difference between homeowners and renter’s insurance? By the end of this post, all of your confusion will be washed away. Ready? Let’s dive in!

What Is Homeowners Insurance?

Homeowners insurance is a type of insurance policy that provides coverage to your home in the event of a fire, vandalism, theft, or weather patterns such as intense winds, lightning, hailstorms, etc. For example, suppose destruction occurs to the interior or exterior of your home due to the above circumstances. Your policy will kick in and help pay to repair or replace the damaged items. 

Homeowner’s insurance can also protect items in your backyard, such as a pool, an expensive grill, and patio furniture. However, be mindful that high-ticket items, like hot tubs and pools, will require extra liability insurance, which can raise the cost of your premium.

Along with the coverage on your home and its belongings, your homeowner’s insurance in South Florida may also provide you with funding if you need to relocate temporarily. For example, if a fire caused great destruction to your home, you may no longer be able to stay there until it has been repaired. In the meantime, your insurance policy can help with the cost of hotels, transportation, and other relocation fees. 

The Average Pay Out Time of Homeowners Insurance

The average amount of time it will take for your homeowner’s insurance in South Florida to pay out is highly dependent on the severity of the damage, the amount of the payout, and of course, your insurance company. 

There have been many instances in which homeowners file a claim with their insurance company and then receive their payout within a few weeks. However, on the other hand, there have also been loads of cases where the process took years. 

Unfortunately, if you are experiencing a delay in your claim payout, there is not much you can do to speed it up. The only thing you can do to avoid a lengthy claim is to have all the proper documentation and proof organized before you file. This will ensure that your insurance company has everything they need to honor your request.

Who Should Get Homeowners in South Florida?

Homeowner’s insurance in Florida is essential for any individual or family who owns a home. Without homeowners’ insurance, you can greatly risk paying a large sum of money if a destructive disaster ever occurs. 

Additionally, you may also be required by your financial institution or bank to purchase a homeowner’s policy when you take out your mortgage. This helps the bank ensure that it is safe to loan you the money to purchase your new home. Most of the time, you can even have a homeowners insurance policy bundled with your mortgage. 

The Average Cost of Homeowners Insurance in Florida

According to Bankrate.com, Florida’s average homeowners insurance policy is $1,648 per year or $137.34 a month. This is just slightly above the national average of $1,383 per year or $115.25 a month. Florida is a bit higher than the national average because of its unique concerns, such as weather patterns, certain zip codes, and the structure of older homes.

It is important to understand that this is just an average estimate, and the actual cost of your homeowner’s insurance very well may be higher or lower. Your exact yearly premium will depend on a variety of factors, including:

  • Where is your home located
  • How much is your home worth
  • The high-ticket items you wish to have coverage for
  • Your deductible
  • Your insurance company

What is Renters Insurance?

Generally speaking, renter’s insurance covers the costs of repairing or replacing a tenant’s damaged items in the event of a theft, fire, or vandalism. However, as with homeowner’s insurance, you will need to pay additional costs if you want to cover valuable items such as expensive jewelry, collectible art, etc.

In addition to protecting your material goods, renter’s insurance can also help cover the cost of injuries that occur within the rental. However, it is important to note that your renter’s insurance only covers accidental injuries that are NOT caused by the structural integrity of the building. If a structural issue were the reason behind an injury, the landlord or property owner would become responsible for paying for the injury expenses.

Renter’s insurance is a wise investment to make because no matter how careful you are, there is always a risk of accidental fires or potential break-ins. It is better to be safe than sorry; renter’s insurance can save you hundreds to thousands of dollars if damage does occur to your personal effects. 

The Average Payout Time of a Renter’s Insurance Claim

Following a disastrous event, you will be expected to file a claim within 48 to 72 hours. These claims are often processed much quicker than homeowner’s insurance because the payouts are typically smaller. If you file correctly and provide all the proper proof and documentation, you can see a payout within 30 days. 

However, if you fail to file properly, you could end up waiting months until you see your payout. For this reason, it is always best to speak with your insurance agent about how the filing process works. 

Who Should Consider Renter’s Insurance?

If you rent a space of any kind, whether it be a condo, an apartment, a trailer home, or anything else, it would be a good idea to purchase a renters insurance policy. In many cases, your landlord may even require that you purchase a renters insurance policy upon signing your lease.

A large number of property owners insist that their tenants carry renter’s insurance in order to lower their risk of lawsuit exposure. In the event that damage occurs to the tenant’s personal property, and they are covered by insurance, the tenant will have a much lower probability of suing the landlord.

The Average Cost of Renters Insurance in South Florida

The Florida coast is susceptible to extreme weather conditions. For this reason, there are a number of reasons for renters to insure their property in Florida, including high winds, hail, and rainstorms. More so, some Florida zip codes are at higher risk for crime, so if your property is damaged or stolen, renter’s insurance covers you and your guests.

Fortunately, renter’s insurance is fairly cheap (one of the most affordable insurance policies you will ever own). Renter’s insurance costs about $12 a month in Florida for about $30,000 of property coverage and $100,000 of liability coverage. The value of the items in your home will determine whether this coverage is adequate.

Again, the more valuable your personal items are, the more your monthly premium will amount to. When signing up for renter’s insurance, you will be required to do an audit to estimate the worth of your home. This can help your insurance agency provide an accurate quote.

A Breakdown of The Key Differences

Let’s break down the key differences between renter’s and homeowner’s insurance in an easier-to-understand format:

  • Homeowner’s insurance is made for property owners and protects against damage that occurs to the interior and exterior of a home. Fires, thefts, vandalism, weather patterns, and fallen trees can cause this damage. 
  • Renter’s insurance protects a tenant’s personal items when damage from fires, vandalism, thefts, or certain storms occurs.
  • Both homeowners and renters insurance cover injuries that happen on the property. However, only homeowners insurance covers injuries that were sustained due to a structural problem.
  • Homeowner’s insurance is more expensive than renter’s insurance.
  • Renter’s insurance does not protect the landlord, only the tenant, and their guests. 

The Bottom Line

When it comes to insurance, understanding what policy to get can be a bit of a challenge. Our best advice about whether to get homeowner’s or renter’s insurance for your home is to think about whether you are a tenant in a rented building or if you own the property. 

Regarding coverage amounts, it is wise to bring a list of everything you want to be covered under your policy directly to your insurance agent. From there, they can help you create a policy that will cover your valuables, protecting you from a heavy financial strain. 

Keep Your Valuables Safe. Get an Insurance Policy!

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