Rents are going up these days, and to make ends meet, a lot of people decide to share apartments or rental homes with roommates. If you have the space and interest in doing so, you can often find having a roommate great for cost savings and social support. However, when combining costs, you might wonder exactly where you will save by having a roommate. Many people ask if they can combine renters insurance policies? Is it a good idea to share a policy with your roommate?
Sometimes, perhaps most-often, it is best that you do not share your renters insurance with anyone else. Most renters benefit by having their own policies to insure their own assets.
The Basics of Renters Insurance
Renters insurance protects the financial and personal security of a resident and their possessions in a leased or rented space. So, with this coverage, even though you don’t own the home, your personal assets will have protection. Most policies offer:
- Liability insurance: Harm or injuries you cause to third parties, like guests, the landlord or their property will gave coverage under this protection. If a lawsuit arises from the accident, coverage could help you pay for your legal costs.
- Possessions coverage: The belongings you move into the rental home—furniture, clothing, electronics, etc—will have coverage under this part of the policy.
- Living expenses insurance: An accident in the home, like a fire, might mean you have to move out while it undergoes repairs. This coverage can help you pay for costs like hotel or dining bills during that time.
- Medical payments insurance: If a guest gets hurt in the home, even if the accident wasn’t anyone’s fault, this coverage can help them pay for their medical bills.
These policies will usually apply to the belongings, liabilities and other insurable assets of the policyholder. The policyholder is usually the tenant who is the primary signee on the lease. However, coverage can also apply to other parties. Where you might run into questions, however, is whether the policy will cover other residents, like your roommates?
Will renters insurance cover your roommates?
When you sign your lease, you might have to list all the people (usually, at least all legal adults) who will live in the home with you. These might be family members or roommates.
However, this requirement might vary, even from landlord to landlord. For example, you might not have to list a family member as a co-occupant on your lease. However, you might have to do so for roommates. In some cases, roommates have to sign separate leases altogether, though this is uncommon. Most likely, you must name a roommate as your co-occupant.
After you sign the lease, you will likely have to buy renters insurance. The landlord might require it. The main signee on the lease usually also becomes the primary policyolder on the renters insurance. However, even if you become the main policyholder, you might need to list other insured parties on the lease.
Many insurance policies define a set of named insureds on the lease. In some cases, the named insured can be the renter, their immediate family, and even extended relatives. So, even if you are the only name listed on the policy, your spouse, children and other relatives might automatically receive coverage. However, check your policy specifically to see what it defines.
When it comes to roommates, whether they receive coverage under the policyholder’s coverage will often depend on a variety of factors. Many renters insurance policies will allow you to insure roommates. However, you might have to list them on the policy.
Therefore, even though this person is not related to you, the policy will name them as someone whose assets and liabilities have coverage. However, the question is, should you take this step?
When to Add Roommates to Renters Insurance
If you share a home with your spouse, adult child or even a long-term partner, then all parties might find benefits in maintaining the same renters insurance. In these situations, most parties co-own, maintain and share belongings. Therefore, the ambiguity of ownership will likely make it easy to see why one renters policy is necessary.
However, when you live with a roommate, you likely own separate assets. Therefore, you might find it a better deal to insure each person’s items separately.
Should something happen to a roommate’s assets, you therefore might be able to avoid a claim on your own policy. That can ensure your own renters insurance risks stay balanced, and you won’t have to pay for any increased premiums. If the roommate has unique, high-value or unique items, they might want their own policy to apply specifically to those assets.
Still, if both roommates agree that they wish to share coverage, then you might be able to do so. However, you usually must name both parties on the policy. Most policies don’t assume roommates to be named insureds. Keep in mind, most landlords will require all roommates to present proof of coverage. Whether this must be in the form of separate policies, or it can exist in the same policy, might vary.
Don’t hesitate to talk to one of our agents at 800.282.2000 to determine when you should and should not buy renters insurance for your roommate.
Also Read: The Importance of Loss of Use Insurance
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