roommates and renters insurance

Living with a roommate can have its perks.

It can be wonderful to have a live-in confidant and is an excellent way to afford that dream apartment you’ve had your eye on.

However–as anyone who has had their fill of cleaning their roommate’s old cereal bowl can tell you–the roommate experience can have its share of obstacles to navigate. Once you’ve mastered the division of household chores and navigating a roommate agreement, there are even more complex issues you may not have thought about.

For instance, whether your prized belongings will be covered under your roommate’s renters insurance policy.

Insurance may seem complicated in general, and adding the additional questions associated with navigating dual coverage can seem overwhelming. Thankfully, it doesn’t have to be.

If you already know why renters insurance is vital, you are halfway there. And while each policy is different, and your provider can inform you about the ins-and-outs of your specific coverage, there are definitely some important things everyone should know before shopping around for the policy that is right for them.

You Must Be Named on a Policy to Be Covered:

Let’s say you applied to a listing and moved into a rental with a current tenant, your new roommate is wonderful, the place is within walking distance of your favorite coffee shop, and your roommate already has renters insurance. It can be easy to assume you are covered too. However, even if the policy is large enough to cover the place, you must be named on the policy in order to receive the benefits of coverage.

To guarantee that you are covered, have your roommate call the insurance provider and ask to have you added to the policy, or pick a policy of your own. There are benefits and downsides to having joint coverage–and some states do not allow two unrelated adults to be named on the same policy–so be sure to check with your selected provider to find out more details.

The Ins-and-Outs of Policy Sharing:

Sharing a renters insurance policy might seem like the simplest solution if one roommate was previously covered, but don’t forget that it’s not always as simple as adding your name to the coverage.

With more belongings comes more value, and if there is a disaster, you and your roommate could find that there is only enough coverage for some of your personal items. Be sure to reevaluate the dollar amount the policy covers; you may need to increase the coverage to verify that all of your belongings will be covered.

If you and your roommate share a policy and evenly split coverage (for instance you both have $10,000 worth of stuff and your policy covers $20,000) then it makes sense to split the cost of your monthly premium 50/50 as well. However, if one roommate has more items–or more valuables–than the other, it makes sense for the roommate needing higher coverage to pay a higher premium.

Pro Tip: To keep it fair, get two quotes, one for double the dollar amount as the person with less to insure, and have them pay half of that quote. The roommate with more to insure will pay the difference of the actual premium.

Individual Renters Insurance Coverage Could be Best:

Sharing a policy requires that you and your roommate are on good terms throughout your tenancy, and it means that you are trusting another person with your claims history. If your things were not stolen, but your roommate is making a claim, it will still be on your claims history and can potentially raise future premiums.

Moreover, there are additional logistics you and your roommate will need to work out when policy sharing. If there are two (or more) names on the policy, a check for your claim will likely have both names on it; who will be responsible for cashing the check and distributing the funds fairly? If one of you decides to move, you will need to work together to make sure that you both authorize the removal of that person from the policy. And if there is ever theft between roommates, an individual policy may be the only way to ensure compensation for the missing items.

For this reason, it can be best to opt for individual policies and avoid a joint policy altogether.

Talk to your selected provider and see if you would truly be saving by creating a joint policy. Keep in mind too, that some providers will discount your policy if you bundle it with your car insurance. After taking discounts and the risks of policy sharing into account, you may find that an individual policy makes more sense.


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