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.
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 few dollars you' might save each month sharing renters insurance with a roommate isn't much. Not enough to be worth your while. Here are a few reasons why:
Imagine filing a claim after a fire causes smoke damage to some of your stuff, 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.
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.
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. This is despite the fact that your apartment 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. Doing so is likely to increase your premium payments, too. This begs the question: why don't you just have your new roommate take out her own renters insurance 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.
It's easy to forget that a renters insurance policy is also a liability policy. This means it provides coverage for accidents and injuries that may occur in your apartment. It also covers 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.
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.
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, your best bet may be for you and your roommate to get your own, individual policies. This way you can avoid dealing with the headaches that could arise should you split or share one.
Not all policies or states allow renters insurance policies to be shared in this way. So this probably should be one of the first questions you ask when shopping around for this kind of coverage.
Although a lot of evidence that suggests sharing renters insurance with a roommate is a bad idea, there are exceptions.
One of them is if your roommate also is your spouse. Spouses usually are covered even if they're not specifically named in these kinds of policies. So if that describes your situation, no need to worry about sharing rental insurance.
Another is if you and your roommate are significant others and are in a stable relationship. Even then a lot of experts would suggest buying individual policies until that stable relationship becomes a fully legal one. Because jointly signing claim checks and getting written consent to remove them from a shared policy is going to be hard if you break up.
If you share a policy or get your own QuoteWizard can help you compare renters insurance quotes.
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