Your renters insurance policy does not cover your roommate, and their policy does not cover you. Each roommate needs their own policy to protect their personal property, and in cases where guests and other visitors will want to sue for liability. For that reason, it’s important to discuss the topic of renters insurance before signing an agreement with your roommate to rent together.
Personal Property Damage
Renters insurance covers the actual value or replacement cost of your personal property when destroyed, damaged or stolen. It’s great to have a policy so that you don’t have to dip into your savings to buy new things. However, this coverage doesn’t cover your roommate’s belongings even though you live together. If your roommate is the one with renters insurance, you’ll need your own for the same protection. Both of you should own a separate policy, and unless you’re considered “high risk”, your policies should cost no more than $15 per month each. A combined policy will only complicate your claims later, and you’ll both end up paying higher premiums later even if you own your own policies.
Another huge benefit of buying a renters insurance policy is that it provides you with lawyers if someone sues you, because they suffered injuries at your apartment. Without a policy, you’ll have to pay for your own legal representation, which you may not be able to afford. Don’t expect free legal services to help, as they tend to stay away from liability lawsuits for the most part. Your roommate’s insurance company will provide a lawyer to represent them in the suit if they have a policy, but not you, and vice versa. Even if its your roommate’s fault that the person suffered injuries, the person suing may include you in the lawsuit as well. You have to be prepared to defend yourself. Having your own policy prepares you for these legal possibilities, and separate policies reduces the negative affect of higher premiums because of a judgment won against your or your roommate.
The same is true for medical payments. You might avoid court altogether by paying that person’s medical bills, but it can cost a lot if you don’t have much money. If each of your have your own policy, then the insurance company can pay for medical payments to the injured individual.
There is the issue of common property that you purchase together as roommates. For many reasons, you should avoid this practice, and it complicates the renters insurance issue. You may have to add your names to each other’s policy in regards to the common property. Every insurance company will offer to handle this “problem” differently, and so it’s important to double check your current renters insurance policy and ask your agent. If you’re comparing quotes, make sure you’ve ask about common property to see which company offers the best solution.
Adding and removing new and old roommates is a hassle, and may affect your your policy down the road. Renters Insurance companies like to handle policies with low risk individuals. Don’t send red flags on your account by changing your policy frequently because you share a policy with different roommates.