Ferri Dawson Insurance Group

You can share utility bills with your roommate, but you should not share a renters insurance policy.

Though some insurance companies allow it, in most instances you should not share renters insurance with your roommate. 

In a previous blog we have explained why you need renters insurance: it covers your belongings, along with providing protections for liability and loss of use.  Roommates are not included by default on a policy, even if you’re both on the lease.  Also, there is not “insurable interest” between roommates, which means they typically don’t have any financial interest in your belongings, and you don’t have any in theirs.

Here are a few reasons not to share a renters policy with a roommate:

1. If they get sued, you could be affected.  Let’s say your roommate’s dog bites someone.  If it’s covered (some policies exclude certain dog breeds), a shared policy means you could be part of the lawsuit.  In addition to being included in the lawsuit and all that would entail, it could also mean higher premiums for you down the road. 
2. Your stuff isn’t the same.  Does your roommate have expensive items, like a wardrobe of professional clothing, or jewelry?  If they have a lot of valuables and you don’t, you could end up paying more than your fair share for coverage.
3. It’s more complicated than sharing an electric bill.  Sharing a policy means you need to make sure your roommate pays their part of the bill.  But things can get very complicated in the event of a claim.  The check will be made out to both names on the policy, even if it’s just your items that were damaged or stolen.  With two names on the check, you will need both signatures to endorse it.  In that instance, if they don’t sign it, you can’t cash it. This situation is magnified with more than one roommate in addition to yourself.
4. Limits on claims. There are limits on certain categories for each claim per incident, no matter who many roommates you have factored into one policy. For example, many home insurance policies only cover up to $2,500 for electronics. This means that even if each one of you has a laptop that costs $2,000 each and all 3 burned at the same time in a fire, the policy would only pay out a max of $2,500. This amount will then have to be split amongst everyone involved. For this reason, the roommates’ renters insurance that you share with your fellow tenants can actually be a disservice.

Your insurance history follows you for several years. If your roommates file a claim for an accident they were in that involved damage to your property, it could end up on your insurance record. While this may not be an issue now, it could cause trouble for you in years to come. After all, if you try to get homeowner’s insurance when it becomes time to settle down, any past claims submitted by your roommates might result in a higher premium or — even worse — being declined altogether. 

Having your own renters insurance policy will provide the protection you need, usually at a very affordable cost.  Additionally, you can both take advantage of the multi-policy discount offered on your auto insurance for having your own renters insurance policies. 

Looking to review your renters insurance, or find a policy?  Let us do the shopping for you.  Give us a call at 724-575-7237 and we’ll get you protected.