Why You Shouldn't Share Renters Insurance with Roommates

Splitting a renters insurance policy could help you and your roommates save a few dollars a month, but it probably won't be worth it in the long run.

roomates moving

You and your roommate already share all sorts of expenses—rent, utilities, even the odd housewares or grocery bill—so you may as well share a renters insurance policy, right?

This question is especially likely to come to mind if you're currently trying to save a bit of money. After all, even a few dollars here and there can really add up.

The problem is, the couple of dollars you're likely to save every month by splitting or sharing a renters insurance policy with a roommate probably isn't going to be worth your while in the long run. Here are a few reasons why that's the case:

1. Cashing a claim check could be a real pain

Here's a scenario that's not all that unlikely to happen: you file a claim with your insurer due to some situation or another—such as a fire in an adjacent apartment causing smoke damage to some of your possessions, but none of your roomie's. (Her room is down the hall while yours is near the front door.)

The check that's later sent to you includes both your name and your roommate's name. As a result, you'll both have to sign it if you want it cashed, even if the proceeds are only supposed to go to one of you.

That may not be the biggest deal in the world if you and your roommate are pals, but it's sure to be a hassle (at best) if you're not on the friendliest of terms. And it's likely to become a full-on nightmare if you get one of these checks after your roommate has moved out.

This situation isn't likely to be much more appealing if only one of your names is included on any check your insurance carrier sends to you, by the way. After all, what if the check is for you, but it's in your roomie's name? That could be awkward regardless of whether or not you two get along or are still living together.

2. Removing your roommate from the policy may be problematic, too

There are all sorts of reasons you may need or want to remove a roommate from a renters policy. Maybe he's moving out on his own accord, or maybe you're kicking him out because he's a total slob or he never pays his rent.

Regardless of the reason, you're going to have to get his written consent before you can remove him as a "named insured." That could be difficult if you're no longer on speaking terms when the time comes to take this kind of action.

Also, what if you forget about this part of the process until long after he's moved out? Getting his written consent in that situation may be even tougher.

3. Your coverage limits won't automatically change just because you add someone to your policy

Let's say your existing renters policy offers $10,000 of coverage for your personal belongings. If you welcome a roommate into your apartment and add (or "endorse") her to your policy, it'll still only cover $10,000 worth of your stuff in the event of a fire, burglary, or some other disaster—despite the fact that your apartment or rental home now likely contains a lot more stuff than it did when you were on your own.

So, unless your new roomie is a firm believer in "living light" and brings just a few earthly possessions into your rental space, you're probably going to want to increase your policy's coverage limits. Well, doing so is likely to increase your premium payments, too—which begs the question: why don't you just have your new roommate take out her own renters insurance policy and pay for it herself, rather than having her pay you for her portion of a shared policy?

All of the above remains true even if your situation is slightly different, such as if you and a friend decide to move into a rental home and then share a renters insurance policy.

4. You've got liability to think about, too

It's easy to forget that a renters insurance policy also is a liability policy that provides coverage for accidents and injuries that may occur in your apartment or home, as well as accidents that occur outside your apartment that you, your pet, or your property caused.

Why that's relevant to this conversation: if your roommate is sued because her dog bit a passerby while they were out on an evening stroll, your insurance rating could be negatively impacted as a result of the litigation.

5. If more than two of you are sharing an apartment or rental home, you probably can forget about splitting a policy

In many cases, only two unrelated adults are going to be allowed to be named on a single renters policy. So, if you're planning to live with more than just one other person, some of you are going to have to buy your own insurance.

6. Renters insurance policies are really cheap

In fact, a renters insurance policy probably will set you back $15 or so a month, which translates to about 50 cents a day.

Given that, and given all of the potential pitfalls detailed above, your best bet may be for you and your roommate to get your own, individual policies so you can avoid dealing with any of the headaches that could arise should you decide to split or share one.

You may not be able to share a policy even if you want to do so

Not all policies or states allow renters insurance policies to be shared in this way (by unrelated adults), so this probably should be one of the first questions you ask an agent, broker, or other company representative while shopping around for this kind of coverage.

It's not always a terrible idea

Although a lot of evidence has been presented so far that suggests sharing a renters insurance policy with a roommate is a bad idea, there are a couple of instances where it's a not-as-bad idea—or even an acceptable one, in the following case.

One of them, of course, is if your roommate also is your spouse. Granted, spouses—or, rather, "resident spouses"--usually are covered even if they're not specifically named in these kinds of policies, so if that describes your situation, you probably aren't going to have to worry about whether or not the two of you should share rental insurance.

Another is if you and your roommate are significant others and are in a stable relationship. Even then, though, a lot of experts would suggest buying individual policies until that stable relationship becomes a fully legal one, as jointly signing claim checks and getting written consent to remove a girlfriend or boyfriend from a shared policy is going to be pretty painful if it doesn’t work out.

In the end, whether you decide to share a policy with a roommate or the two of you agree to get your own policies, QuoteWizard can help you compare quotes from a number of different renters insurance providers.

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