What You Need to Know to Protect With Roommates Renters Insurance?

1. Can Roommates Share Renters Insurance?

This is a common question, because it seems like it would be a great way to save on insurance premiums each month. The answer is that it depends both on the insurance provider and the state; it’s not always permitted, but you can quickly find out just by talking to an agent. Whether you should share renters insurance for roommates or not is another question, which we’ll dive into below.

2. The Risks of Sharing Renters Insurance With Roommates

Splitting the cost of renters insurance each month sounds great, but it might not be worth it in the end. A few of the risks involved with sharing renters insurance with roommates include:

• Claims: If your roommate files a claim, that goes on your insurance record too (even if you had nothing to do with it). This means that your roommate’s claim could mean your premiums increase, since insurance companies see both you and your roommate as more of a financial risk. This is particularly risky in terms of the personal liability portion of renters insurance, because claims can be much more expensive.
  Another thing to note is that if a claim is approved, reimbursement cheque are typically made out to both roommates, even if the damage is to only one roommate’s belongings. Your roommate would need to co-sign that cheque, which requires some degree of trust.
• Payments: Missing an insurance payment can void your policy. If your roommate misses a payment, you could be left without coverage. 
• Cost of Insurance: Things can get dicey if one roommate has more valuable belongings than the other, because the total value of both sets of belongings determines the insurance premiums. If the insurance premiums are higher than expected, it could create resentment or tension between roommates. 
• Coverage Limits: It’s important to note that renters insurance has coverage limits, meaning they’ll only reimburse you and your roommate to a certain financial extent. Having a second person on the policy doesn’t double the coverage limit, but now you split it. If the value of both your belongings exceeds that coverage limit, you could be in a risky situation. 
• Moving Out: If a roommate moves out, you’ll need to redo the policy in your name only (or with a new roommate), which means finding new rates and coverage. This can create a lot of work and headaches, so unless your roommate will be with you long term, it might make more sense to have your own policy.

There are quite a few risks to sharing renters insurance with roommates, so it’s important to really know and trust your roommate before agreeing to it. People crashing on your couch or subletters definitely don’t qualify, but even a friend you’ve known for years can be a risk and could leave you on the hook. 

3. Tips for Renters Insurance With Roommates

There are times when it makes sense to share renters insurance with roommates, and in those cases, a few tips can help ensure that everyone is happy with the arrangement. 

• Make sure both roommates are on the lease. 
• Make sure that shared renters insurance is allowed in your state and with the insurance provider you choose. 
• Get a quote for renters insurance for just yourself; you might be surprised at how affordable it is and you won’t have to worry about the risks of sharing insurance.
• Inventory everything you women and everything your roommate owns to ensure the coverage limit makes sense for the value of both your sets of belongings. This will simultaneously ensure you’re completely covered but also not overpaying for insurance that you don’t need. 
• Determine a budget for renters insurance that works for you both. 
• Make sure both roommates won’t be moving out anytime soon, to avoid the extra work of having to redo the policy. 

Sharing renters insurance with roommates can be a great way to save money, if the circumstances are right. Either way, you want to make sure you and your belongings are fully protected should the unexpected happen.