Rent these days isn’t cheap. In Texas, the statewide average rent was $1,020 for a 1-bedroom, and $1,240 for a 2-bedroom apartment—both higher than the national average. The median rents in the four most-expensive cities (Dallas, Houston, Austin and Plano) were each more than $1,500. That’s why it’s common for renters to take in roommates to make ends meet. However, how do you need to structure your renters insurance in these cases?
It’s sometimes possible for roommates to carry one renters insurance policy between them. However, in many cases non-related roommates need separate policies. By buying separate renters policies, roommates can potentially save themselves a lot of hassle should problems occur. Furthermore, separate policies allow roommates better control over their own autonomy and assets.
Renters Insurance for Related Roommates
Suppose that you move into a rental home with your family. Certainly, your family members are your house mates. However, they aren’t usually roommates for insurance purposes. Most of the time, immediate family members can receive coverage from the same renters insurance.
Renters insurance usually offers both possessions and liability coverage. The possessions insurance can cover your belongings, while liability coverage can compensate others who get injured because of your mistakes. Within family structures, there is likely very little distinction between your personal assets and those of your spouse, children, wards or guardians. Therefore, there’s no reason to separate coverage.
Renters Insurance for Non-Related Parties
When roommates aren’t related to each other, questions might arise as to whether they should insure both parties under the same renters insurance. While it is sometimes possible for roommates to buy one renters insurance policy, that doesn’t mean you should take this course of action. Simply put, renters policies usually can’t appropriately address the separate risks of separate people.
On one hand, if you and your roommate share ownership of most assets in the home, then it might make sense to buy the same policy. Couples that live together but aren’t married might find this the right solution. Still, this means that you will insure all your possessions, in addition to your liabilities on the same policy.
Therefore, if one party needs to make a claim on the policy, it could still affect the other party. Even if one party had nothing to do with the ownership or cause of the claim, they could face potential consequences, including increased policy rates in the future. In any case where you and your roommate carry separate assets, then it’s usually best to buy separate coverage. You’ll cover your assets, while the roommate will cover theirs.
There are good perks to buying separate renters insurance policies between roommates. First, there’s the benefit of not having to carry someone else’s claim on your own insurance history. If your roommate’s ring gets stolen, they can make a claim on their own policy. You won’t have to see any blemishes on your own policy, nonetheless.
Not only that, separate renters policies allow roommates to still maintain a degree of autonomy from one another. Each has the freedom to choose the appropriate liability and coverage limits for their own needs. So, say perhaps that one roommate decides to move out. They can take their coverage with them, while the renter can keep theirs in the property.
Keep in mind, there are some cases where even families should get separate policies. For example, suppose that you decide to room with one of your cousins. Yes, you are family. However, you also probably keep your belongings and assets separate to a high degree. Therefore, your renters insurance might be best kept separate.
Please note, if one roommate owns the home, while the other rents, then both parties will likely have to buy separate coverage. The owner will need homeowners insurance, while the tenant will need renters insurance.
Also Read: Why Rental Occupancy Limits Exist
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