Renters Insurance: Are Roommates Covered?

Many people need roommates to make ends meet, whether they are in college, just starting their careers, or are older adults living on a limited income. Such individuals frequently want to know if a renter’s insurance policy covers their roommate.

Renter’s Insurance Only Covers People Named in the Policy 

The short answer to this question is no; roommates are not covered by renter’s insurance if they are not on the policy. If, however, the roommate is included in the policy, then the policy will cover every person named in the contract. 

Problems With Sharing Renter’s Insurance

There are numerous drawbacks to consider before entering such an agreement. First, the policy will only cover up to the named limits. Such a policy covers a total of $10,000 in total damages, not for each person. The difficulty here is when roommates have a different amount of personal possessions. Any recovery check will come made out to all the named policyholders. How the policyholders divide the check will be up to them. 

Sharing renter’s insurance between roommates can lead to serious disputes. Not only can there be problems with determining how to divide any award, but also roommates can move out. Roommates are then left to fight out their responsibility to continue making payments on the policy. Further, any recovery check will come written to every person named on the policy. This can cause problems when an absent roommate, who suffered no damages, ends up with a claim to a recovery check. 

If one roommate moves out but pledges to continue making payments for the renter’s insurance policy, they often can fail to uphold that promise. If the payments aren’t made, the policy voids. 

When Does Sharing a Renter’s Insurance Policy Make Sense?

There are a few situations when sharing might make sense. If the roommates are siblings, then many of the above cases won’t cause problems. Some people in relationships believe sharing a policy makes sense. But, unless it’s a well-established relationship, sharing renter’s insurance isn’t a good idea. 

The problem is that relationships can suddenly end. A shared renter’s insurance policy can then make the breakup even worse than it has to be. 

College Students

Students who live in dorms generally will be covered if their parents have a homeowner’s policy. Such roommates will not need renter’s insurance. But, if they rent an off-campus apartment, college roommates will need renter’s insurance. 

Think Twice Before Sharing Renter’s Insurance

Given the risks involved, sharing a renter’s insurance between roommates is rarely worth the trouble. The better solution is each individual should purchase their own renter’s insurance policy.

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