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The Difference Between Renters and Homeowners Insurance

By February 10, 2015 June 9th, 2020 No Comments

front of houseWhether you rent or own your home, the property as well as its contents should be protected with insurance. For those who own homes, homeowners insurance can protect the home and the home’s contents. If the home is a rental, the owner of the home would insure the property, while the renter is responsible for insuring the contents of the home. Both homeowners and renters insurance require regular payments that can range from monthly up to one lump annual payment, and a policy must be in good standing in order to pay out on a claim. Both also require the payment of a deductible for claims, unless otherwise specified in the policy.

A homeowners insurance policy is taken out by the owner of the home. A property owner is not obligated to insure his or her property unless there are special circumstances, but a homeowner who has a mortgage is required to take out an insurance policy. The amount of insurance generally covers the cost to replace the home in the event of a total loss, and additional insurance can be added to cover the replacement value of the items in the home. If a home costs $200,000 to rebuild and the items inside the home cost $150,000 to replace, a homeowner who wanted to cover everything would need to insure the property for at least $350,000.

Renters insurance is for occupants who do not own the property but want to protect their personal belongings that are in the home or on the property. It is important for renters to note that the property owner’s insurance policy does not cover them, and their items are lost in the event they are damaged or destroyed. Renters insurance policies will reimburse a renter for the replacement cost of property that is lost or damaged while on the property.

If you have any questions on your homeowners insurance policy or need us to help you find one, call Loftis & Wetzel Corporation at (580) 363-3434 for more information on Oklahoma City home insurance.

(Source: www.investopedia.com)