Yes, you can share tenant insurance with roommates, but at what cost? While the average cost of renters insurance fluctuates on location, apartment type, and the cost of your belongings, it’s still less than ordering delivery through Uber Eats.
You can share Uber Eats orders with roommates; everyone can pitch in and split the cost, but who gets the leftovers? Therein lies the problem with sharing insurance with roommates.
While there are some times it can still make sense, you can’t take shortcuts. We provide tips on how to share tenant insurance with everyone further down.
Does each tenant need renters insurance?
If you want a hassle-free claims experience, a clean insurance history, and a guarantee that you’ll be covered following a flood, fire, or other risks, then yes, each tenant should have their own policy.
Tenants’ insurance isn’t mandatory (unless the landlord stipulates it in the lease), so technically, no one needs it. But remember, the landlord’s insurance does not protect the tenant or their belongings.
What does tenant insurance cover anyway?
Tenant’s insurance covers more than just your valuable possessions. But it’s a good time to quickly chat about it. You can add a roommate to your policy, but failing to up the content limits, you could be out thousands of dollars trying to make up for the shared losses.
Yes, contents insurance does make up the bulk of the cost of renters insurance, but the other two components of a renters policy are critical.
Additional living expenses is a fancy way of saying your insurance company will pay for you to live elsewhere (think hotel and food) while your apartment is repaired following a claim. So, hurricane winds smash through a window and whipping rains pour in, damaging your stuff; your insurance company will cover the costs of living somewhere else.
Without your own policy (and depending on your roommate), you could be paying your own accommodation or couch surfing with friends and family (if that’s an option).
Liability insurance ensures that anyone who suffers an injury entering or visiting your pad gets their medical expenses paid for by your insurer, not you. Suppose your roommate’s dog bites a visitor’s hand, causing irreparable damage, or a visitor slips down icy steps. In that case, they could sue you for thousands of dollars, if not hundreds of thousands. With your own policy, concerns about who’s paying for what are nil.
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The risks of sharing tenants insurance with roommates
- If your roommate files a claim, it shows up on your record, too, which could increase your premiums in the foreseeable future.
- Suppose your roommate is in charge of paying the monthly premium and forgets. In that case, you could both be left uninsured (and deemed higher-risk in future applications).
- Splitting the bill 50-50 makes sense until claims time. Depending on your policy and your contents limits, you may only be covered for $2,500 worth of electronics. So, who’s getting their laptop replaced and who isn’t? Does your couch get replaced or their bed?
- Roommates can come and go like the weather. Who takes the policy with them while the other applies for a new policy?
- Did you know renters insurance covers your stuff while you’re travelling? Will your roommate let you know they made a claim abroad?
- With their name on the policy, it means your roommate can cancel the policy at any time without notifying you.
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Tips for sharing renters insurance with roommates
Ok, so you’re not sold. You’d rather split the $15 monthly charge. I get it. Especially if you’re students and cash is tight. If so, here are a few tips, the most important to be clear and transparent with how it all works.
- Know your roommate – Can you trust them? Sharing financial information and insurance history can be risky. If you just met them on Facebook, it may not be the best move.
- Record everything – Whether in an app, a shared doc, or even a video – walkthrough each room and evaluate each item’s worth. Open drawers, dressers, and take extra time around electronics, furniture, and other expensive items. With a contents inventory, you now have a document to prove what you have to the insurance company, and you’ll know how much contents insurance you need.
- Open and honest communication – Who’s paying the bills? What happens if we need to make a claim? If a fire breaks out, how are you going to split the claim money?
- Get an insurance broker – A broker can walk you through the details of the policy and answer any other questions you may have. They can also save you money. If you have car insurance, they can bundle the two policies together for some savings.
- If your students, call your parents – If you live in a college dorm, your parents’ individual homeowners’ insurance policies likely have you covered.
- Prenup – Sharing with your partner? It may be more important to put it all in writing than not. If you want respect, be respectful. If there isn’t any, maybe it wasn’t meant to be.
The bottom line
Does everyone need renters insurance? Yes, it’s much better than the ensuing headaches and stresses it could cause without individual policies. If you’re going to share it anyway, do so carefully with the help of a professional. You can compare renters insurance with us now. Not only will we give you the best price, but we’ll also connect you with a licensed advisor who can help answer the tricky questions.