Does Each Resident Need Renters Insurance?

Q&A: Does Each Resident Need Renters Insurance?

(To each their own — renters insurance policy, that is)

Table of Contents

Does each resident need renters insurance?
Why wouldn't I want to share a renters insurance policy with my roommate?
What problems could arise from sharing a renters insurance policy with a roommate?
What should I do before I decide to share a policy?

Does each resident need renters insurance?

I'm about to rent a new apartment but I've never had a roommate before. I've had renters insurance policies in the past, but now I'm curious whether I should keep my own policy and have my roommate purchase their own policy, or whether we can share a policy. 

Is it even possible to share a policy, and if so, what should I know before I make a decision?

The short answer to this question is yes, many insurance providers will allow you to share a renters insurance policy with a roommate. However, your roommate won't be covered under your renters insurance policy unless he or she is named in your policy as an additional insured. 

I'll get into the longer answer to this question below. Just because you can share a renters insurance policy doesn't mean you necessarily should. While splitting the cost of the policy is attractive, there are a lot of other considerations that could clarify why you may want your own. 

Why wouldn't I want to share a renters insurance policy with my roommate?

There are a couple of main reasons why you may not want to share a renters insurance policy with your roommate. Those reasons include:

  • Shared claims history: If your roommate makes a claim under the shared renters insurance policy, that claim will be on your record too. For example, if a piece of your roommate's property is lost, destroyed, or damaged, that claim will be on your record. It's best to maintain your own record so you don't pay higher rates in the future because of claims that weren't even yours.
  • Roommates move: It might seem like a good idea to have a roommate now, but those relationships often fall apart or are short-lived. If you have both roommates on the same policy, it can make for a mess (financially and otherwise) when your roommate moves out. 

What problems could arise from sharing a renters insurance policy with a roommate?

As I briefly touched on above, there are several problems that could arise with sharing a renters insurance policy with a roommate. These problems include:

  • No guaranteed savings: Most roommates share a policy for the savings, but there's no guarantee that you'll actually save. A lot depends on your coverage and the personal property you want protected. That being said, it's best to speak with your independent insurance agent to evaluate whether a shared policy will actually save you money.
  • Cost disputes: Although many roommates split a policy to save money, there could still be cost disputes. For example, if your belongings cost significantly more than your roommate's belongings, the cost of the policy will be greater because of you. Splitting the policy 50/50 in that circumstance could cause problems. 
  • Shared insurance history: As I briefly mentioned above, a shared policy means a shared insurance history. This could be a problem in the future if your roommate files a lot of claims. Even though you may not have filed any, you'll look "riskier" to insurance providers because your roommate's claims will be on your claim history due to the shared policy.

What should I do before I decide to share a policy?

Before you make any decisions about sharing a renters insurance policy with a roommate, you should speak with your independent insurance agent. Your agent will be able to discuss the pros and cons of sharing a renters insurance policy based on your unique circumstances like the value of personal possessions.

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TrustedChoice.com Article | Reviewed by Paul Martin

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