Roommates can sometimes purchase a renters insurance policy together, but it may not be a good idea because claims and coverage can quickly become complicated. We recommend that each tenant in a rental unit purchases their own policy.

If you are considering adding a roommate to your renters insurance policy, you should first consider the benefits and disadvantages. In this article, we'll cover:

Does renters insurance cover roommates?

Most states allow roommates who live in the same unit to be named on a single renters policy. However, renters insurance only covers the people listed on the policy, so if your roommate isn't named, they are not covered. This is true for all renters insurance coverages, including personal property, personal liability and additional living expenses. So, if you and your roommates' property is damaged in an apartment fire, insurance only covers the property of the policyholder and listed individuals.

It is not always possible to add roommates to your renters insurance policy, especially if you and your roommate are not relatives. States have different regulations and insurance companies have different policies. Check with your provider to see if you can add a roommate to your policy. Keep in mind that your rate will likely rise if you add another individual to your policy.

Does everyone in an apartment need renters insurance?

You are not legally required to have renters insurance, but your landlord can require it as part of your lease agreement. Even if your landlord doesn't require it, we still recommend buying a policy. Renters insurance is relatively affordable and provides protection against possible financial losses.

Do college students need renters insurance?

If you live in a dorm, your parents' homeowners or renters insurance policy should cover you. However, if you live off-campus, you should purchase a renters insurance policy.

Why separate policies are better

Even if your state and insurer allow you to add roommates to your renters insurance policy, you should still avoid doing so. Here are a few reasons why:

1. Claims go on the policyholder's record

If a property claim is filed under a renters insurance policy, it is recorded in the policyholder's CLUE report (Comprehensive Loss Underwriting Exchange). Insurers use CLUE reports to assess their customers' claims history, and that in turn factors into insurance rates.

That means if you're the policyholder and your roommate files a property claim, it will go in your insurance history, too. Having a claims history usually results in higher insurance rates, which means you may have to pay more once your current policy expires.

If you or your roommate file a claim for which the insurance company agrees to reimburse you, the claims payment usually goes to the policyholder. You and your roommate will then have to decide how to split the claims reimbursement.

2. Liability protection extends outside the apartment

Renters insurance includes liability insurance, which protects people on the policy in and out of the house. That means by including a roommate on your policy, you are taking partial responsibility for your roommate's actions in the sense that a liability claim against your roommate could affect your claims history.

For example, if your roommate's dog bites someone while out on a walk, the legal and medical bills could come back your way. Or imagine your roommate's guest is injured in your apartment. Once again, the aftermath could result in a claim on your policy and show up on your CLUE report.

3. Unequal coverage needs

Policy limits are shared between individuals on an insurance policy. That means if your policy has $25,000 of personal property coverage, $25,000 is the maximum amount the insurance company will cover — not $25,000 per person.

You and your roommates' coverage needs may likely differ. For example, what if your roommate has a jewelry collection, but you don't? Your roommate might want to add a jewelry endorsement to increase the coverage limit, but that will raise your rates. In cases like this, a combined policy can make splitting the cost tricky.

4. Removing your roommate can be difficult

If your roommate moves out, you'll have to remove them from the policy. You'll also have to negotiate new rates and coverage with your insurance company, and go through the whole process of getting a new policy again.

Are separate renters insurance policies more expensive?

Adding your roommate to your policy may be cheaper, but renters insurance is one of the most affordable types of insurance around. According to our study, the average renters insurance premium in the U.S. is just over $15 a month, or $179 a year. This means that a shared policy between two roommates would only save each roommate about $90 a year.

Joint renters insurance: when it makes sense

There are some situations when a joint renters insurance policy makes sense, for example, if you live with a relative, spouse or long-term partner.

In order to share a renters insurance policy with your roommate, all of the following criteria must be true:

  • Your state laws permit it.
  • You are both named on the lease.
  • The insurance company allows it.

For example, by law, unrelated roommates in Florida cannot share a renters insurance policy. On the other hand, spouses and dependent family members are almost always eligible to be listed in your renters insurance policy. In order to understand your options, we recommend contacting a local insurance agent.

How to add someone to your policy

If you decide to add another individual to your policy, here are some steps to take to ensure everyone is adequately protected:

  1. Increase your property limits - There are limits to how much an insurance policy will reimburse you after a loss, and adding a roommate to your renters insurance policy won't automatically raise these limits. Because the policy will cover more personal property, you should increase your property coverage limits.
  2. Make an inventory of your property - In order to know how much protection you need, you first need to know how valuable your belongings are. The average renter owns $20,000 of personal property, according to Esurance. Making an inventory of your property is a great way to get a sense of how much coverage you need. This can help ensure that you aren't underinsured and that you don't overpay by purchasing coverage you don't need.
  3. Get your and your roommate's names on the policy - You will need to add your roommate's name to the policy. If you don't add your roommate's name, then he or she won't be covered.

Bottom line

Renters insurance does not cover your roommates unless they are listed on the policy. However, QuoteWizard recommends that each tenant purchases their own policy. Additionally, state and insurance company regulations may prevent you from adding roommates to a renters insurance policy.

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