Roommates and Insurance
Renters insurance is a complicated topic, with policies and laws varying from company to company and state to state. Even though it’s impossible to create a general guide to understanding its ins and outs, here are some things that will come in handy to all renters with roommates out there.
What’s in a name
Say you moved into your new roommate’s extra bedroom and they’ve already purchased renters insurance. In order for you to benefit from the coverage, you need to be added to the policy even if you are not on the lease. Without your name on the policy, in case of property loss, you can’t file a claim.
It’s good to remember that some company policies and local laws don’t allow more than two unrelated adults on the same policy. If you have more than two roommates in the same apartment, you might not be able to get a shared policy. In that case, you should opt for individual policies. Get in touch with your preferred renters insurance provider, and they will answer all your questions.
Sharing a policy means increasing the coverage
It’s not usually sufficient to be added to someone else’s policy without adjusting the coverage; the dollar amount on it might not be enough to cover the items of both of you.
For example, your roommate might have a policy that covers $10,000 of their belongings. When you move in, you come with your own belongings, worth roughly the same as theirs. To rest assured that all your possessions are protected, you need to up your coverage to include your belongings, too.
While it makes sense to split the policy premium evenly if your coverage is evenly split, if one of you requires more coverage than another, you should split the bill proportionally.
Sharing a policy leads to sharing a history
Any claims you make to your insurance policy will follow you and can affect the rates you pay for coverage in the future. When you share a renters policy with a roommate, you’re sharing the insurance history, as well. So with a shared policy, even if your things don’t get lost or stolen, you will still hold responsibility for the claim.
Sharing a renters insurance policy also means that everyone taking part in it need to be on good terms. For example, when a check is issued for your claim, most likely both names will be on the check and both of you will need to present to cash it (or one of you will need to sign and endorse it). Also, when one of you moves out, both of you will need to approve removing their name from the policy.
Sharing a renters insurance policy can be convenient, but if you’re not on the best terms, you should consider getting your own independent policy.