Renters insurance protects your belongings and offers liability coverage if you're renting an apartment, home or condo. If you're cohabitating with a boyfriend or girlfriend, it may seem practical to split the cost of a renters insurance policy. However, there are more potential drawbacks to sharing a policy than there are benefits. These include having to share policy limits, as well as problems with getting claim checks cashed or changing the policy in the event of a breakup.
This article will cover:
What is renters insurance?
Renters insurance primarily covers your belongings against damage and theft in your rental home. It also provides liability coverage if you are responsible for injury or property damage. The standard types of damage a renters insurance policy normally covers are:
- Fire and smoke
Renters insurance can also provide coverage for additional living expenses (ALE) to cover extra costs if you have to relocate while your rental home is repaired after covered damages. If your car is broken into and your belongings are stolen, renters insurance should cover that as well.
Common exclusions to renters insurance include:
- Flood damage
- Earthquake damage
- Damage that is your landlord's responsibility
- Home business equipment
While renters insurance isn't required by law, the majority of landlords require renters to have it as part of the lease agreement.
Can two people share renters insurance?
Most states allow two unrelated people living in the same rental home to share a renters insurance policy. Sharing a policy is allowed by many renters insurance providers as well.
Should a couple share a renters insurance policy?
While sharing a renters insurance policy is often permitted, it's usually not the best idea for multiple reasons.
One reason why it's not in your best interest to share a renters insurance policy is how it can affect your insurance claim history. For example, if someone steals your partner’s laptop and they file a claim, that claim will stay on both of your insurance histories for up to seven years. Filing a renters insurance claim can result in a premium increase, too. You may never file a claim yourself, yet still pay higher rates because of your partner's claim.
Furthermore, your insurer could make out the check for a claim to both people on the policy. Should you break up in the meantime, this could make getting the check cashed incredibly difficult if both of you have to sign it. You can get someone taken off your policy, but many insurance companies require written permission from them first. That could be more of a hassle than you want to deal with at the time.
Another reason not to share a renters insurance policy is that it may not save you money in the long run. Take ALE coverage, for example. Say you need to relocate while damage to your rental apartment is fixed, and the policy you share has a $3,000 limit. That limit will be shared between both of you. The ALE money will not go as far as it would if you each had your own policies.
If you and your partner jointly own a lot of things, a shared renters insurance policy might make sense. Otherwise, you're probably better off getting separate policies.
Getting a shared renters insurance policy
If you decide to go ahead and share renters insurance, the first step is to find an insurer that allows joint policies. Many insurers allow it, so this shouldn't be too much of a hurdle. Take this opportunity to compare renters insurance quotes from multiple companies. The average cost of renters insurance is $10 a month, and may be as high as around $31 a month. Finding the best coverage at the best price is the goal.
Make sure that both of your names are on the lease, as your insurer will need that in order to make sure you are both covered by the policy.
Also, you'll want to make an inventory list of everything the two of you want covered under the policy. Make sure to add in make, model and replacement cost when you can. This will help you set an accurate dollar limit for your coverage, too. You don't want to have insufficient coverage, nor do you want to pay more than you need to for it.
If the belongings that you and your significant other own together are too many to conveniently cover in separate policies, then joint renters insurance is a reasonable way to go. Otherwise, the decrease in individual coverage and the hassles that can arrive in the event of a breakup make sharing a renters insurance policy potentially more trouble than it's worth. With a little hunting, you should both be able to find inexpensive coverage that works out better than a joint policy.
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