Renters Insurance and Roommates: What You Should Know

Do you rent your home and have renters insurance? You may be wondering if your policy covers your roommate and their belongings. Usually, individual renters insurance policies don’t cover roommates, but some companies offer an option to share a policy.

While it may save you a bit on insurance costs and monthly premiums, it may be shortsighted. Before adding a roommate to your policy, you should know what you’re signing up for. Use our guide to renters insurance and roommates to make an informed decision.

Is It Possible to Share Renters Insurance With Roommates?

Most insurance companies allow you to add roommates to your policy. Some people may do this to share the cost, even though renters insurance is one of the most affordable types of insurance available. It’s also one of the most straightforward to understand. However, adding roommates to your renters insurance is where things can get complicated. 

How Renters Insurance Works

If you’re going to share renters insurance with a roommate, your roommate’s name must be on the policy. Even if your roommate is your significant other, renters insurance will only cover those listed on the policy if you aren’t legally married.

All renters insurance covers:

• Additional living expenses
• Liability coverage
• Personal possessions

Though there are some exclusions depending on the policy, we’ve outlined what each protection includes below.

Additional Living Expenses

Additional living expenses (ALE) are considered a loss of use coverage. If you lose the use of your home through disaster, it will cover expenses you might incur while living elsewhere. ALE covers a range of expenses and includes the cost of a temporary rental, hotel bills, restaurant bills, and any other loss of use expenses.

Liability Coverage

Personal liability coverage protects you from potential lawsuits for any property damage or bodily injury that you, your family members, or your pets may cause to other people. If your dog bites someone, liability insurance will help with the medical costs associated with the bite. If you are outside throwing a baseball and it breaks your neighbor’s window, liability will also cover the costs.

Personal Possessions

A standard renters insurance policy offers personal property coverage. This coverage protects your personal belongings from theft or damage. You’ll get reimbursed if you lose your possessions in a fire or someone steals your computer. You must perform a home inventory of all of your personal property. Doing this makes filing a claim much easier.

The above protections are standard in a renters insurance policy. Remember that if you want your roommate to have these protections, their name must be on the policy. Otherwise, the protections only extend to you.

The best way to iron out the details of a policy is to talk it through with an insurance agent. They will help you understand all the ins and outs and ensure you understand the responsibility of being a policyholder.

What To Know Before Sharing a Policy

An insurance policy is an obligation, and sharing that obligation with someone else is a serious decision. Below are some things you should know before signing on to a policy with a secondary party.

Your roommate’s claims go on your record.

Sharing a policy with someone goes on your personal insurance history regardless of who makes a claim. Insurance claims can stay on your insurance record for up to seven years, and your claims history can raise your insurance rates on future policies. 

You may have to reapply for a policy if your roommate moves.

Roommate situations can be impermanent, especially for college students. If you’re sharing a home with someone for the semester, or they are pursuing career opportunities in a different location, you likely have to update or reapply for a policy if they move. 

Missing a payment can leave you uninsured.

If you’re sharing a policy and your roommate is responsible for the bill, you could lose coverage if they miss a payment. Regardless of whether you pay your portion on time, you could risk losing coverage if you have a forgetful roommate.

If a claim is filed, the reimbursement check is made out to everyone listed on the policy.

Anyone whose name appears on a reimbursement check must sign it. Let’s say your computer gets stolen, so you file a claim. Even though your belongings are the only ones affected, you and your roommate must sign the reimbursement check to get a payout.

Tips for Sharing Insurance

So you’ve decided to share a renters insurance policy with your roommate. According to our research, these tips will help you avoid frustration with a shared policy.

• Don’t share a policy with more than one other person. If you have more than one roommate, the best course of action is for each person to hold their own renters insurance policy. Separate renters insurance policies mean you won’t have to divide any payouts, which may be insignificant if divided among multiple people.
• Make sure you trust your roommate. Is it someone you’ve known for years or a random person you met through an online posting?
• Perform a careful home inventory. Having a detailed list of your belongings can help keep track of who owns what and help you value your items if you need to file a claim.
• Talk openly and honestly with your roommate. You’ll need to decide collectively on several things, like coverage limits and who pays the bills. Make sure everyone is on the same page by communicating openly — it will give you peace of mind in the long run. 
• See if bundling discounts are available. Many insurance agencies offer bundling discounts for holding multiple policies. If you’ve got a car insurance policy, you may be able to save some on your renters insurance premium.

How Much Will It Cost?

One benefit of sharing renters insurance coverage with a roommate is that you can split the cost. However, renters insurance is one of the more affordable types of insurance. The average cost of renters insurance is about $15 monthly or $174 annually. 

Final Thoughts 

Renters insurance is an affordable way to protect yourself and your possessions. While sharing a policy with a roommate is possible, it’s something that should be considered carefully.

Other Renters Insurance Resources