Renters insurance vs. landlords insurance: What does each policy cover?

What’s the difference between landlord insurance and renters insurance?

If you are renting out your home, you will need a landlord insurance policy to protect against covered perils similar to home insurance for your primary residence. If you are a renter, you need renters insurance to protect your personal property.

Here are what each of these policies cover:

Landlord insurance:

• Protection of the dwelling (damage to the structure of the home or property)
• Protection of personal property (furniture or appliances that come with the unit)
• Loss of use coverage (if the property becomes temporarily unlivable and tenants are forced to evacuate, this covers your lost rental revenue)
• Liability protection (if a tenant or guest is injured on the property and the landlord is held liable)

Renters insurance:

• Protection of personal property (all belongings within the renter's home and sometimes vehicle)
• Loss of use coverage (covers temporary living expenses if you’re forced to evacuate)
• Personal liability of medical bills (if someone is injured at the rental)

Now let’s look at who might be responsible in the following scenarios.

What if there’s a leak in the roof?

A big storm led to some roof damage to your rental. Whose insurance will cover it? 

The landlord’s insurance policy should cover the repair of the roof and any water damage done inside to the floors, structure or furnishings belonging to the landlord. If the damage is enough that you have to leave while repairs are made, they will also cover loss of revenue for the period you aren't paying rent.

But they won’t cover your belongings. The renters policy takes over to cover damages to your stuff. If you have to leave while repairs are made, it can also pay for your alternative lodging.

What if your (the renter's) dog bites someone while on the rental property?

Your (otherwise lovely) dog just bit someone badly enough that they require medical care. Who is paying that bill: your renters insurance or your landlord’s policy?

This one is more complicated. Since it’s your dog that bit someone, you and your renter’s insurance are usually the first to be held liable. This is because you, the occupier, should have awareness of the danger level presented by your dog, and are thus more responsible for injuries it inflicts.

That said, your landlord also has a responsibility to keep their property safe. If they become aware that a dog is dangerous and fail to take action to have it removed from the property, they can also be held liable. This is why many landlords have stipulations about what pets or particular breeds can live in their units.

What if someone robs your place?

Someone breaks a window, sneaks into your rented home and steals your TV, computer and some jewelry. Whose insurance is paying?

The landlord’s policy could pay for the broken window and any other damage to the property from the robbers. If the thieves stole anything belonging to the landlord (say, large appliances like an oven or furniture if it was a furnished unit) those could also be covered. 

The rental policy would cover your belongings that were taken. It’s important to keep a record of your belongings to expedite the claims process.

What if there’s a flood?

Unprecedented rain leads to a river overflowing and your first-floor apartment is completely flooded. Whose insurance will take this one?

Unfortunately, flood damage is usually not a covered peril on either landlord insurance or renters insurance policies. If you live in a flood-prone area, you will usually need to carry a separate policy specifically for flooding.