Building Insurance vs Home Insurance: Key Differences Explained

At Ontario Insurance Broker, we understand that protecting your home is about more than just the property itself—it’s about the life and memories you’ve built inside it. Take Sarah, for example. She recently bought her first home and was confused by the differences between building and home insurance. Like many, she wasn’t sure which she needed or if both were necessary.

As Sarah learned, building insurance protects the structure—walls, roof, and floors—while home insurance covers the belongings inside, from furniture to electronics. Both are essential for comprehensive protection.

In this guide, we’ll explain the key differences between these 2 building insurance vs home insurance. We help you choose to keep your home and everything in it safe.

What Is Landlord Building Insurance?

Landlord building insurance is a type of insurance designed specifically for property owners who rent out their buildings. If you’re a landlord, this insurance helps protect your property from damage caused by fire, flood, storms, or vandalism. It covers the structure of the building itself—walls, roof, floors, and even built-in fixtures like kitchens and bathrooms.

This insurance doesn’t cover your tenants’ personal belongings—that’s where contents insurance comes in—but it ensures that your property is protected against major damages that could be expensive to repair. If something happens to the building, landlord building insurance helps you cover the repair costs, so you’re not left with a huge financial burden.

In short, if you rent out your property, landlord building insurance gives you peace of mind that your building is covered, no matter what happens.

What Is Landlord Home Insurance and What Does It Cover?

Landlord home insurance is a special type of insurance designed for property owners who rent out their homes or apartments. Unlike regular home insurance, which covers the owner’s personal belongings and the structure where they live, landlord insurance is tailored to protect the property when it’s being rented out to tenants.

So, what does it cover? Well, it typically includes:

1. Building and Structure Coverage: This covers damage to the physical structure of the property, like the roof, walls, and floors. If there’s a fire, storm, or other accident that damages the building, this part of your insurance will help cover the repair costs.
2. Landlord Liability Protection: If a tenant or visitor gets injured on the property and sues you, liability protection can help cover legal costs and potential settlements.
3. Loss of Rent: If the property becomes uninhabitable due to an insured event (like a fire or flood), this coverage can help replace lost rental income while the property is being repaired.
4. Contents Insurance (Optional): If you provide furnishings or appliances as part of the rental agreement, this coverage can protect those items in case of damage or theft.

Landlord home insurance is a smart investment to protect both the property and your rental income, giving you peace of mind as a property owner.

Building Insurance Vs Home Insurance

There are many differences between building insurance vs home insurance such as:

Aspect	Building Insurance	Home Insurance
Coverage	Covers the structure of the property (walls, roof, floors, etc.)	Covers personal belongings inside the home (furniture, electronics, etc.)
What It Protects	Protection for the physical building and permanent fixtures	Protection for personal possessions and contents
Typically Includes	Fire, flood, storm damage, vandalism, and structural issues	Theft, fire, water damage, personal liability, loss of valuables
Who Needs It	Homeowners, landlords, property investors	Homeowners, renters, or anyone with valuable items inside their home
Does It Cover Land?	No, it only covers the structure of the building itself	No, it only covers contents and personal belongings
Policy Type	Often required by mortgage lenders for property owners	Usually optional but recommended for renters or homeowners
Example	Damage to the roof, walls, or foundation due to a storm	Theft of electronics, furniture, or clothing from the home

Building Insurance vs Home Insurance Cost

Here’s an updated table with more detailed cost estimates based on statistical data and averages for building insurance vs. home insurance:

Higher premiums in areas prone to natural disasters like floods or storms. For example, building insurance may increase by 20% – 30% in flood-prone areas.	Building Insurance	Home Insurance
Coverage Type	Covers the structure of the property (walls, roof, floors)	Covers both the structure and personal belongings inside
Average Annual Cost	$300 – $500 (depending on property value and location)	$900 – $1,500 (for a standard policy in the U.S.)
Cost Factors	– Property value- Location- Building materials	– Property value- Value of personal belongings- Home size- Security features
Location Impact	Similarly, home insurance premiums in high-crime areas may be 10% – 15% higher.	Larger homes with more contents (e.g., homes over 3,000 sq. ft.) can see premiums increase by 25% – 40% depending on the coverage needed.
Property Size Impact	Larger properties or homes over 2,500 sq. ft. may see an increase of 15% – 25% in premiums.	Larger homes with more contents (e.g., homes over 3,000 sq. ft.) can increase premiums by 25% – 40% depending on the coverage needed.
Personal Belongings Coverage	Not included (only the physical structure)	Typically covers belongings up to 50% – 75% of the home’s insured value. For example, if your home is insured for $300,000, contents coverage may range from $150,000 – $225,000.
Liability Coverage	Usually not included unless explicitly added. Some policies may include limited liability protection.	Includes $100,000 – $300,000 of liability coverage by default, with options to increase.
Average Claim Payout	The average payout for building insurance claims in the U.S. is $10,000 – $15,000 for storm or fire damage.	For home insurance, the average payout for property damage (including personal belongings) is $20,000 – $40,000, depending on the severity of the claim.
Premium Adjustments for Security Features	Not applicable, but some policies may offer discounts for fire-resistant materials or alarms.	Homes with security systems or safety features like smoke alarms and burglar alarms can save 5% – 15% on premiums.

Which One Is More Beneficial For Anyone?

Home insurance is generally more beneficial for homeowners, as it covers both the property structure and personal belongings, along with liability protection. For landlords, building insurance is more useful since it focuses on the property’s structure and can include coverage for loss of rent, but tenants should get their own home insurance to protect their possessions.

Renters benefit from home insurance to cover personal items and liability, while people in disaster-prone areas may need both types for complete protection. In most cases, homeowners and renters will find home insurance to be the most comprehensive and beneficial option.

FAQ

What is the difference between building insurance and home insurance?

Building insurance covers the physical structure of your property, like walls, roof, and floors, while home insurance covers both the structure and your personal belongings inside, including furniture, electronics, and personal items.

Do I need both building and home insurance?

It depends on your situation. Homeowners typically need both—building insurance for the structure and home insurance for personal belongings. Renters should only get home insurance to protect their possessions, while landlords need building insurance to protect the property they own.

Is building insurance cheaper than home insurance?

Yes, building insurance is usually cheaper because it only covers the property’s structure. Home insurance, which includes both the structure and personal belongings, tends to be more expensive.

Can I have building insurance without home insurance?

Yes, if you own a property but don’t have valuable personal belongings, you might only need building insurance. However, most homeowners opt for both for complete protection.

Conclusion:

In summary, the choice between building and home insurance depends on your needs. Home insurance is generally more beneficial for homeowners and renters as it covers both the structure and personal belongings, providing comprehensive protection. Building insurance is primarily useful for property owners, especially landlords, who need to safeguard the property’s physical structure. Ultimately, having the right coverage ensures that your property and belongings are protected, and it’s always advisable to consult with an insurance provider to tailor a policy that suits your needs.