Can you share renters insurance with a roommate?

By: Zandile Chiwanza on September 17, 2020

COVID-19 has changed the way we do many things, and that includes back-to-school planning. With most schools switching to online classes, some students' dreams of living on campus and experiencing dorm life this fall have been disrupted. As a result, some may have had to get an apartment with roommates instead, at least until things go back to normal.

Typically when you move in with roommates you agree on how you’ll split the bills before you sign the lease. From rent to electricity to household items, you have to decide how to manage shared expenses together. But what happens when your landlord requires renters insurance? Can you add it to the list of bills you’ll split?

Although it’s not mandatory, renters insurance has many benefits — mainly that it protects you and your personal belongings. Your landlord's insurance will not cover you if a fire, theft, or any other hazard occurs in your rental unit. Without this coverage, you’ll be on the hook for damages, and this can be very costly, especially if you’re on a tight budget or aren’t earning an income while completing your studies, for example.

Can you share renters insurance with a roommate? 

Unlike immediate family members who live together, a renters insurance policy will not automatically cover you and your roommate(s). The good news is that some insurance companies allow policyholders to list individuals on their renters insurance policy, even if they’re not related.

There might be limits on how many roommates can be listed on one policy so if you live with two or more people, each of you will need to check with your insurance provider if it’s possible to be on the same policy. 

The main advantage of sharing renters insurance is being able to split the cost. Plus, there’s no extra charge to add a roommate to your policy. Your premium will only increase if you increase your coverage in some way, such as adding an endorsement for jewelry or other valuable items.

If you’re looking for other ways to save money, Leslie Lacroix, senior vice-president at Insurance Operations HUB Customer Central, suggests you speak to your insurance broker.

“Increasing the deductible is one of the more obvious ones rather than eliminating the policy altogether,” says Lacroix. “Sometimes there's some additional coverage on the policy that you may not need or that is nice to have.” 

If you’re trying to save money, you can switch from an all-perils coverage, which protects your belongings against the widest range of hazards to named-perils coverage, which only protects your belongings from the most common types of hazards, such as fire and water damage. An all-perils policy is the more expensive option of the two.

Should you share renters insurance with a roommate?

Now, before you add a roommate to your policy there are disadvantages you should keep in mind. Blending insurance histories is not always a smooth process. For example, if you’re sharing a renters policy and your roommate files a claim that doesn’t involve you, that claim will also appear on your insurance record. And this could affect the cost of your premiums in the future when you go to apply for homeowners insurance, for example. 

You also have to think about how much you know and trust your roommate. Either person can change or cancel the policy at any time and all claim payouts in the event of a loss will be payable to both of you and it’s up to you and your roommate(s) to decide beforehand how you’ll divide it. You also need to consider how long you will be living together. If you get a new roommate every semester, you’ll have to remember to let your insurance company know and update your policy. 

That’s why Lacroix recommends that each tenant get their own renters policy. Not only is it less complicated; it also ensures that each tenant has personal liability coverage. If somebody sues you as a result of an unintentional act or situation, such as getting injured inside or outside your home, then any financial loss that arises will be covered by the personal liability portion of your insurance policy. $1 million is generally the recommended minimum for personal liability coverage, but you can choose your own limits when purchasing your policy.

And that coverage “follows you anywhere in the world,” says Lacroix.

“Generally speaking, if somebody were to sue you for something like that, you're likely looking at hundreds of thousands, maybe a million or a couple of million dollars. And that's where the policy is really protecting you from that financial devastation.”