Today’s topic on which we are going to talk to you, people often ask why is homeowners insurance more expensive than renters insurance. There are many reasons behind this which we will tell you in a simple way so that you can understand easily. First of all you will need to know what is homeowners insurance and renters insurance let’s understand.
Homeowners insurance
homeowners Insurance is a type of insurance which protects our home from various types of objections and damages. Let us tell you this by giving an example so that you can understand easily.
“Suppose you have a big house and there are many valuable things inside the house, for the protection of which you get your house insured with homeowners insurance. And you keep paying the amount of insurance premium as per the insurance policy to the insurance company. In the future, whenever there is a fire or theft in your house due to any reason or in simple words, any such incident occurs which causes loss in your house. Then you do not need to worry because all the losses are compensated by the insurance company.”
Renters insurance
What is renters insurance? Here we will tell you by giving an example so that you can understand well.
“Suppose you work somewhere outside where you do not have your own house or due to some other reason you have to live in a rental house. And you have many expensive items in your rental home that you want to protect. Then we get renters insurance to protect the belongings kept in the rented house.”
Why is homeowners insurance more expensive than renters insurance?
Well, we hope that you must have known about what is homeowners insurance and renters insurance. Now without any delay we are going to tell you why is homeowners insurance more expensive than renters insurance and what are the reasons behind it.
- Coverage level
- Risk
- Increasing insurance claims
- Different prices in different places
Coverage level
The most important point is that a lot of things are covered in the home insurance of the owner. First of all, keep his house in it, the premium things, his vehicle and many other things have to be protected by the insurance company. And when a tenant is living there, he gets home insurance done, then only his contents are insured and not the house in which he is living because that house is the property of the landlord.
Therefore, when the insurance company has to take the responsibility of protecting more things in the home insurance of the owner, then their premium will also be expensive.
Risk
There is more risk in homeowners insurance than that of tenants because the home owner’s insurance covers his house, his valuables, his vehicle and many other things, due to which the home owner has to pay a higher premium for home insurance.
Increasing insurance claims
The number of homeowner insurance claims has increased significantly compared to before and the number of renters insurance claims is still somewhat lower. This is because insurance companies cover many things in homeowners insurance, due to which there is always a risk of one thing or the other getting damaged due to too many things. Due to which the number of homeowners insurance claims increased and when the number of claims is increasing, the insurance company is also increasing its premium.
Different prices in different places
Many times what happens is that the price of insurance premium is different in different places. Because of which some people find the price of homeowners insurance to be higher than renters insurance.
Conclusion
Why is homeowners insurance more expensive than renters insurance? There are many reasons for this in our article till now. But there is only one main reason for which it is all related and that is that in Homeowners Insurance, more contents are covered by the insurance company than in Renters Insurance, due to which Homeowners Insurance is more expensive than Renters Insurance.
