You’ve just finished high school or college and are out on your own for the
first time, or maybe you’re saving up for a down payment on your dream home. If
you are renting an apartment or house, you can protect yourself and your
personal property through renter’s insurance (also called tenant homeowners
insurance). This coverage is relatively inexpensive and will give you peace of
Unlike a homeowner, you do not need to purchase insurance for the structure of
your home—your landlord should take care of that. However, just like a
homeowner, you need to be sure you have liability protection and insurance
coverage for your personal property.
Personal Property Coverage
Tenant insurance will pay to repair or replace your personal property that is
damaged, destroyed, or stolen—whether you are at home or away from home. Your
landlord’s insurance does not offer this protection to you. You can purchase
various levels of insurance for your property. The best way to determine how
much coverage you need is to conduct a home inventory and verify your needs
with your Penn National Insurance agent.
Usually there are specific limits for jewelry, computers and other electronic
equipment, and stolen cash. Your home inventory will indicate whether or not
you need to increase your level of coverage. Increasing your limits will raise
your premiums, but you will have adequate coverage.
Most tenant policies will cover your personal property at actual cash value.
This means that you would be reimbursed for the purchase price of the item less
a sum for depreciation and wear or tear. This amount will generally not be
enough to purchase a brand new replacement. Talk to your agent about changing
your policy to replacement cost coverage, which will reimburse you for the
amount it will actually cost you to replace the item in today’s market.
Like a homeowners policy, a tenant policy provides liability protection if you
are legally responsible for the injury of another person on your property. If
the injury is due to negligence on the part of your landlord, their policy will
be responsible for covering the damages. Be sure to inform your landlord of any
repairs that need to be made to keep your home safe for your family and guests.
Liability coverage will also pay for legal expenses that are incurred in
defending yourself in a related lawsuit.
A tenant policy generally offers $100,000 worth of liability coverage. Since
many renters are on their own for the first time and don’t have many other
assets to protect, this may be an adequate level of coverage. However, if you
have investments or other sizable assets to protect, you may want to increase
the limits of your liability coverage. This will protect you from financial
devastation in case you are sued because of personal injury or property damage
that occurs in your home. Check with your agent to realistically evaluate your
Joint Purchase of a Policy
To decrease expenses, some renters have roommates, and wonder if they can
purchase a joint policy. The answer varies from state to state, and even from
company to company. Ask your agent for recommendations. To be certain of your
coverage, you may want to have each roommate carry their own insurance policy,
to avoid disputes in case of a loss. Also, be sure that the true ownership of
property is clearly defined before a loss occurs.