Two friends, Taylor and Bob, recently got a job and will be moving to their new apartment next month. Thankfully, they will be working in the same organization, so they have decided to share the apartment. They are happy to have each other as roommates, but they’re not sure if they should share their renters insurance. While Bob thinks it is a great idea to share renters insurance with a roommate, as it will save them a few bucks, Taylor is still skeptical — can roommates share renters insurance? Let’s help them find out!
Who is covered in renters insurance?
Most insurers allow roommates to share an insurance policy, but you need to use your discretion if you really want to share it with your roommate. Do note that if you and your roommate are related by marriage, adoption, or blood, then you two are automatically covered in one policy, but if not, you need to think through whether you want to share it.
Important things to know about renters insurance policy
- Although the law doesn’t mandate it, many landlords require their tenants to have a policy before signing the lease.
- If you are not related to your roommate, the insurance policy will not cover their belongings unless you have a shared renters insurance policy.
Pros of sharing renters insurance with roommates
If you and your roommate are related or know each other well, then there’s nothing like sharing renters insurance. Having one policy can save you a considerable amount of money. But make sure you have enough coverage to cover individually owned items and the belongings you own jointly.
Cons of sharing tenant insurance with roommates
- Affect your future premiums: Suppose you share the insurance with your roommate, and an incident happens, and your roommate files a claim. Even if you have nothing to claim or have nothing to do with the incident, the claim will go on your insurance record as well. This may lead to a rise in your future premiums, too, by a significant amount.
- A missed bill payment can lead to uninsured status: If your roommate misses paying the bill, both of you can end up with an uninsured status. So, it’s definitely one of the pitfalls of sharing renters insurance with a roommate.
- Determining the premium amount could be tricky: A renters insurance policy cost is determined by the value of all your belongings. But if one of you has more costly belongings than the other, how would you choose the premium amount? An equal split won’t be fair, and one person paying more than the other can lead to a tiff even among the most amicable friends.
- A roommate can move on: Think about Taylor and Bob. If either leaves their job and moves to a new city, the other has to reapply for new renters insurance or update their existing policy. So, if you’re usually moving every other year or yearly, it makes more sense to have your own policy. But if you’re in a relationship with your roommate and share most of your belongings, then having joint renters insurance will make more sense.
- Your premium amount can change: If your roommate buys expensive belongings and changes the policy coverage to get the items covered, your premium amount will increase too. You will certainly not want to pay more for not possessing any expensive belongings.
- Your roommate can cancel the policy without your consent: If your roommate is moving out, they have the right to cancel the policy without your permission. This can leave you in a fix that you would certainly not want.
Tips for sharing renters insurance with roommates
Know your roommate: Linking finances or insurance history by sharing renters insurance with your roommate is a critical decision. Before jumping into it, evaluate how well you know your roommate. Have you been friends for long, or have you just met? Take some time to think before making a decision.
Talk it out: Whether you share renters insurance with your roommate or not, an open discussion is essential. Some questions to consider are: When will the billing date be? What’s the budget going to look like? What are your possessions? If one of you has more possessions, and if your belongings get destroyed in a fire, how will you divide the money? Having clarity on all these questions will help you in the long run.
Consult an agent: Every situation is unique, so it is advisable to consult an agent who can better guide you. Let the agent know your situation, and they can take you through the pros and cons of sharing renters insurance with roommates.
Making a video: Make a video of both of your belongings and rented space — don’t miss out on the drawers and cupboards. This will help in an accurate evaluation that you might otherwise miss if writing down everything.
Deciding whether to share renters insurance with a roommate can be a tricky decision. Considering all the pros and cons will help you make an informed choice.
If you’re looking for a roommate, know that Roomi helps you find the perfect roommate through a verified community. Whether you want to find your next BFF or just want to split the rent, Roomi lets you find your next roommate in any city and within your budget. Download the app today.