Young people often find roommates are convenient partners to share costs in their first homes. Roommates often share rent, utility bills and certain possessions. They occupy and take care of the same safe. Yet, each party’s renters insurance needs remain separate entities. Why can’t you combine these policies, you ask? The simple answer: Separate policies create full protection for each individual.
Don’t become tempted to add your roommate to your own renters insurance. Don’t ask them to add you to their policy either. Instead, make sure you both carry separate policies.
Why You Need Two or More Renters Insurance Policies
Yes, it technically is possible to add a roommate to your renters insurance policy. The would become an additional insured entity. However, doing so usually is not the best course of action. Why?
The chances exist that your roommate could experience an isolated loss or liability that only impacts them. You, on the other hand, might have no business in the matter. Nevertheless, if that person is on your insurance policy, they’ll have to make a claim on your coverage. So, even though you had nothing to do with the loss, you face the prospect of an insurance claim. The resulting claim might increase your risk factors and your insurance premiums.
Let’s say that one of your roommates causes a liability loss on the property. Even though you didn’t cause the problem, you’ll still have to make a claim. Because liability claims often prove very expensive, the claim might cause rate increases. Since you didn’t make the mess, it’s often unfair to face a rate increase due to the actions of a roommate.
It often makes sense monetarily that roommates should carry separate policies. Separate coverage will protect liabilities uniquely. They’ll also extend to the personal possessions of each renter. So, there will be very little confusion about who should claim what damage on their policies. The risk of insurance fraud will drop in these cases.
There Are Exceptions, However
At times, it might be okay to add a sibling, spouse or live-in partner to your own rental policy. In these cases, you both share a lot of assets. So, it might be cost-effective to carry a joint policy.
Yet, still use caution. Always discuss the ramifications with your partner or sibling. What neither party wants to endure is a rate increase or loss due to the mistake of the other individual. The decision to enter these agreements should only come with the consensus of all involved. These include all roommates, the landlord and the insurer. Reach a suitable consensus before buying coverage.
Also Read: Pet Liability Insurance in Renters Policies