Should renter’s insurance cover roommates? Extending and sharing renter’s insurance with roommates sounds like a good idea. After all, sharing the rent of a Davie rental property with a roommate is a good way to save money on rent, utilities, and more. However, splitting the renter’s insurance cost is not that simple. Often the question is, can roommates split a single renter’s insurance policy? Before trying to answer that, you should establish what a renter’s insurance policy offers. To whom does the coverage extend? And what the pros and cons of sharing a policy are?
These days most if not all landlords insist tenants buy renter’s insurance. This is because the property owner probably has insurance protecting the rental property, but it does not cover a tenant’s personal property. In the event of a fire or burglary, a renter’s insurance policy comes to the rescue. It helps the renter to minimize the loss by reimbursing the cost of personal items that were damaged or stolen. And it also protects a tenant against liability claims should anyone get hurt while at the property.
Renter’s Insurance Covering Roommates.
More often than not, individual tenants possess their own renter’s insurance policy. However, bear in mind, that a renter’s insurance policy usually only covers the policyholder and his personal effects. It does not include other people residing at the residence – but there is a caveat. Putting it simply, it is possible to share a renter’s insurance with a roommate. While state laws differ, in most instances, you have the option to add a roommate to a renter’s insurance policy. But bear in mind, to share a renter’s insurance policy, everyone covered by the policy is required to be listed on the lease. In addition to being listed on the insurance policy itself.
Renter’s Insurance: Some Important Considerations.
So, should you extend your renter’s insurance to cover roommates? Just because you can share renter’s insurance doesn’t necessarily mean you should. There are some pros and cons to sharing a policy. The first thing that comes to mind is when you share a renter’s insurance policy with a roommate, you also share their insurance history. So, in case your roommate files a claim, that claim would also appear on your insurance record. And with each additional claim, you will be subject to higher insurance rates in the future. This is not ideal, especially when you were not the one who filed the claim.
Apart from the matter of higher insurance premiums, you have to take some other considerations into account before sharing a renter’s insurance policy. The cost of a renter’s insurance largely depends on the value of the items and the personal effects of a renter. So, if one roommate has far more valuable things than the other, then the other roommate with lower budgeted items may resent paying the 50/50 split. And this becomes even more problematic, when three or four roommates share a rental property, and also share each other’s items like musical instruments, stereo equipment, and cookware. And it does not just end there. What if a roommate or two, need to vacate the rental property abruptly?
What If Roommate Arrangements Change Abruptly?
Yet another important to bear in mind is that roommate arrangements can change pretty abruptly. It is not uncommon for one or more roommates to relocate at short notice. This could be because of a new job opportunity. Or in the case of military personnel, moving to an outstation base. Or moves can be the result of unforeseen professional or personal circumstances. Now with these roommates moving out, possibly the entire financial burden of the renter’s insurance policy can fall on the remaining roommate. Therefore, the policy will cost the remaining party much more than they had agreed on earlier.
If you are considering sharing a renter’s insurance policy with a roommate, it’s important to ascertain the individual’s situation firsthand. Only after doing so, talk to both, an insurance agent and your roommate. An open conversation with every person involved helps you make the proper decision, and obtain adequate cover against unforeseen circumstances.
How We Can Help?
If you’d like to talk to an expert on the matter, contact Real Property Management Premier and ask one of our Pompano Beach property managers. From owners to tenants, we can help. Contact us online or call us at 954-362-5235 today.
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