Dwelling Fire Insurance Vs. Homeowners Insurance: What’s the Difference?
When it comes to protecting your property, understanding your insurance options is key — especially if you own a rental home, vacation property, or vacant residence. According to the National Fire Protection Association, in 2023, U.S. fire departments responded to nearly 1.4 million fires, which caused an estimated $23 billion in property damage. With statistics like these, the right insurance policy is a necessity.
Not all policies are created equal, however. Two common options — homeowners insurance and dwelling fire insurance — offer very different protections. At Oakwood Risk, we help property owners choose coverage that fits their situation and risk exposure.
Key Differences Between Homeowners Insurance and Dwelling Fire Insurance
Both policies protect physical structures, but their scope, cost, and ideal uses differ greatly.
Homeowners Insurance
A standard homeowners insurance policy provides broad protection. It’s typically required by lenders for primary residences and includes:
- Dwelling coverage for the structure of your home
- Personal property coverage for belongings like furniture and electronics
- Liability protection in case someone is injured on your property
- Additional living expenses if your home becomes uninhabitable due to a covered peril
For example, if a tree falls on your house or you’re sued after a guest falls and gets injured on your slippery or uneven driveway, homeowners insurance helps cover the costs. It’s ideal for owner-occupied properties that need comprehensive protection.
Dwelling Fire Insurance
Dwelling fire insurance coverage, also known as a landlord or fire policy, offers more limited protection but can be a smart option in certain scenarios. It generally includes:
- Dwelling coverage for the physical structure
- Optional coverage for detached structures like garages or sheds
- Optional add-ons for liability and loss of rental income
Unlike homeowners policies, dwelling fire insurance coverage often excludes personal belongings unless added as an endorsement. It’s ideal for:
- Rental properties
- Vacation homes
- Vacant homes
- Investment properties
These policies are customizable and typically cost less than homeowners insurance due to their narrower scope.
FAQ About Dwelling Fire Insurance Vs. Homeowners Insurance
What is the main difference between dwelling fire insurance and homeowners insurance?
Dwelling fire insurance typically covers only the structure of the home and limited attached features. Homeowners insurance includes broader coverage for the structure, personal belongings, liability, and additional living expenses.
Who should consider dwelling fire insurance coverage?
Property owners who rent out their homes, own secondary residences, or have vacant properties may benefit from dwelling fire insurance due to its flexibility and cost-effectiveness.
Does homeowners insurance cover renters’ property?
No, a homeowners insurance policy does not cover the personal belongings of renters or tenants. Homeowners insurance protects the structure of the home and the personal property of the homeowner, not the renter. Renters need their own renters insurance to cover their belongings, personal liability, and potential additional living expenses if they need to move out due to a covered event.
Does dwelling fire insurance cover personal belongings?
Generally, no. Dwelling fire policies focus on the structure, although some policies may offer optional limited personal property coverage.
Can I get liability coverage with dwelling fire insurance?
Liability coverage is usually not included by default but can sometimes be added as an endorsement.
Is dwelling fire insurance cheaper than homeowners insurance?
Yes, it often costs less because it provides more limited coverage. However, the lower cost may not be worth it for primary residences that require broader protection.
Can I insure a rental property with homeowners insurance?
No, standard homeowners insurance is designed for owner-occupied homes. If you’re renting out the property, homeowners insurance may not cover damage or liability claims related to tenants. Instead, you’ll need landlord insurance (often classified under dwelling fire insurance), which is tailored for rental properties and includes protections like tenant-caused damage, lost rental income, and landlord liability.
Will my mortgage lender accept dwelling fire insurance?
Yes, for investment or rental properties, most lenders accept dwelling fire (landlord) insurance, as it meets the risk requirements. However, for primary residences, lenders typically require full homeowners insurance to ensure protection for both the structure and personal contents. Landlord insurance policies generally meet lender requirements for rental homes because they include structure coverage and landlord liability protection.
Get Help Finding the Right Coverage
Whether you own a single rental unit or a portfolio of properties, Oakwood Risk can help you determine the right fit. From customizing dwelling fire insurance coverage to ensuring you have the best homeowners insurance for your needs, we’re here to guide you every step of the way.
Contact us to get a personalized assessment of your property’s risks and explore tailored coverage options.
Oakwood Risk
Oakwood Risk provides industry-leading insurance services, solutions, and counsel to our clients. Our professionals are valued for their ability to provide outstanding customer service, with a commitment to the relentless pursuit of value-added solutions, results, and comprehensive coverage.
