Roommates and Renters Insurance - How does it work?
You like your roommate. You trust your roommate. But should you both be on the same renters policy?
The answer, in most instances, is “No,” even though some insurance companies will allow it.
Renters insurance covers your belongings, along with providing protections for loss of use, liability, etc. Roommates are not included by default on a policy, even if you’re both on the lease. Also, there’s no “insurable interest” between roommates, which means they typically don’t have any financial interest in your stuff, and you don’t have any in theirs.
To put it another way: If you didn’t renew your lease, you’d take your things, and they would take theirs. It’s not like a divorce, with a lot of shared property. (Although maybe you’d both fight to take that rice cooker you bought together and never used).
Here are three reasons not to share a renters policy with a roommate:
- If they get sued, you could get hurt. Say your roommate’s dog bites somebody. If it’s even covered (some policies exclude certain dog breeds), a shared policy means you could be part of the lawsuit. That would be a hassle, and it might mean higher premiums for you down the road.
- Your stuff isn’t all the same. Does your roommate have expensive items, such as jewelry? If they have a lot of valuables and you don’t, you could end up paying more than your fair share for coverage.
- It’s more complicated than sharing the power bill. First of all, sharing a policy means you need to make sure your roommate pays their part of the bill. But things can really get complicated if there’s a claim. The check will be made out to both of you, even if it’s just your stuff that was damaged or stolen. If they don’t sign it, you can’t cash it. (Important note: If your roommate steals your stuff, it is not covered by renters insurance... and it's probably a good time to find a new roommate, too.)
While you already share a place with your roommate, you probably don’t need to share your insurance. Having your own policy will provide the protection you need, usually at a very affordable price.