What You Should Know About Sharing Renters Insurance With A Roommate

What You Should Know About Sharing Renters Insurance With A Roommate

Renting is on the rise among millennials, with many sharing apartments with roommates. Having a roomie has its perks, including more affordable rental, utility, and food costs. If you live with one, you may want to know if it’s possible to share renters insurance. In truth, you can do that. Then again, is it safe? Let’s find out below.

What is Renters Insurance?

Renters insurance is a policy that provides you financial coverage if your personal property is damaged, destroyed, or stolen. It also covers your liability if someone is injured while in your rented apartment, home, or condo.

For example, if your next-door neighbour leaves the bathtub water running and it overflows and damages your carpet, shoes, and floor-standing appliances, your insurer will cover the cost of replacing such valuables.

A burglar might also break into your shared apartment during a night out, and cart away expensive items like PCs, gaming consoles, flat-screen TVs, and other personal belongings. Such losses can leave you and your roomie with hundreds, if not thousands, of dollars of costs to bear, without renters insurance.

However, if your stolen items are covered, you can purchase new ones without spending a dime.

Benefits of Sharing Renters Insurance with a Roomie

While you can share renters insurance with a roommate, there are pros and cons to doing so. Let’s start with the former.

Your Costs Are Split

If you and your roommate share renters insurance, you’ll each end up paying half the price. In fact, you can save up to $100 a year. For students on a tight budget, this is a big plus.

You’re Both Protected

As one policy typically covers you and your roommate, if something happens to your shared apartment, such as a fire, you will both be protected. This is especially important if you have expensive belongings. It will be easy to replace them without breaking the bank.

You Can Pool Resources

If you and your roommate both have expensive belongings, you can pool your resources and create a bigger policy that will cover both of you. It’s a great way to make sure you’re both covered.

Is It Safe to Share Renters Insurance with a Roommate?

In regards to this question, there is no clear-cut answer since it depends on your roommate. Some states don’t permit sharing renters insurance, Florida being one. In such states, you are exempt if the person in question is related to you, for example, your spouse. Otherwise, you’d have to purchase separate renters insurance policies.

If your state allows shared renters insurance among roommates, you still need to consider these factors before proceeding.

Claims Limit

This is the maximum amount of money the policy will pay out in the event of a claim. It’s worth considering since it determines how you and your roomie will replace your stolen, damaged or destroyed items.

Some insurers pay between $1,500 and $2,500 per coverage for electronics. It implies that if you and your roommate buy a policy of $2,000 and a fire accident destroys your phones and PCs, it may be difficult to cover their full value fairly.

It may also cause a squabble between you and your roomie, who may suffer a more costly loss.

Increased Administrative Task

When you have roommates, you will have to manage and administer the policy together. It includes tasks such as paying the premiums, approving claims, and updating policies when one person leaves. For some people, such requirements are too tedious and may dissuade them from sharing the insurance.

Legal Protection

Your tenant’s coverage will not you from a lawsuit filed by your roomie. This is why you should read the small print of your shared renters insurance policy. To be on the safe side, get your own coverage.

Claim Approval

Since you share renters insurance with your roommate, both of you will be required to file a claim. In some instances, your claim may be rejected if your roomie did not authorise it.

Furthermore, if the insurance writes you a check and your roommate is unhappy with the split amount, the individual may refuse to sign it.

To avoid confusion or potential conflict, always consult your policy and discuss filing a claim with your roommates.

Increased Premium

Regardless of who files the claim, sharing renters insurance will increase your premium by, at least, 20%. This can be annoying, especially if you did not cause the accident that necessitates a claim. It could also appear on your insurance record for up to 7 years, which might affect future rental applications.

Risk of Losing Protection

If you split the insurance bill with your roommate and one of you fails to make a payment for a certain month, your policy may be terminated. This could leave you uninsured and liable for damages in the case of an accident.

Precautions to Take Before Sharing Renters Insurance

In most cases, sharing renters insurance is not recommended since you don’t know the person in question, how diligent they are in paying their bills, and how they will reach in case of a loss.

It is a risk that you may not be comfortable with, even if it seems tempting at first. If you’re still intent on sharing renters insurance, here are a few things to keep in mind.

Assess Your Roomie

The primary purpose of renters insurance is to protect your personal property. If you are going to share it with someone, you should assess the individual’s reliability and financial position. If the roomie is of questionable character, it would be best to get your own policy.

Make an Inventory of Your Belongings

Determine the value of your belongings and decide who owns what. If you are going to share the cost of insurance, it would be logical to have equally valued possessions.

Communicate to Avoid Confusion

Since you live with someone else, shared insurance is bound to create a bit of friction. As such, you need to have frequent conversations with your roomie to avoid conflicts.

Also, update your renters insurance policy whenever your belongings increase in value, or if one of you moves out.

Speak to an Insurance Agent

If you are going to share renters insurance with your roomie, you need to have the right coverage. Otherwise, you might end up footing a pocket-draining bill. A good way to start is by speaking to a reliable agent.

Conclusion

Sharing renters insurance with a roommate may seem like a viable alternative to paying twice the price. However, the situation comes with some risks. It’s advisable to take things slowly and avoid making decisions on the fly.

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