Sharing apartments with roommates is becoming more common as housing prices skyrocket. But can tenants share their renters insurance?

Renters insurance does not cover your roommates unless they are listed on the policy. Roommates can sometimes purchase a joint renters insurance policy together, but it’s probably not a good idea because claims and coverage can become complicated quickly. We recommend that each tenant in a rental unit purchases their own policy. Here’s why.

Does renters insurance cover your roommates?

​Renters insurance only covers the people listed on the policy, so if your roommate isn’t named, they are not covered. This is true for all renters insurance coverages, including personal property, personal liability and additional living expenses. So if you and your roommates’ property is damaged in an apartment fire, insurance only covers the property of the policyholder and listed individuals.
Renters insurance does not protect unlisted roommates because covering more people increases the insurance company’s risk. To reflect this risk, your rates will likely rise if you add another individual to your policy. Additionally, renters insurance does not cover theft by a roommate or intentional damage to property caused by your roommate.
It is not always possible to add roommates to your renters insurance policy, especially if you and your roommate are not relatives. States have different regulations and insurance companies have different policies. Therefore, it is frequently impossible for roommates to purchase a joint policy, even if they want to.
Does each tenant need renters insurance?
You are not legally required to have renters insurance, but your landlord can require it as part of your lease agreement. Therefore, every tenant is not required to have renters insurance by law, but every tenant can be required to purchase renters insurance by the landlord. Even if your landlord doesn’t require it, we still recommend buying a policy because renters insurance provides great value.
Why separate policies are better
There are a handful of reasons why roommates shouldn’t share a renters insurance policy. Here’s what we think are the most compelling arguments for separate policies:

​1. Claims go on the policyholder’s record. 
    If a property claim is filed under a renters insurance policy, it is recorded in the policyholder’s CLUE report (Comprehensive Loss Underwriting Exchange). Insurers use CLUE reports to assess their customers’ claims history, and that in turn factors into insurance rates. That means if you’re the policyholder and your roommate needs to file a property claim, it will go in your insurance history. Having a claims history usually results in higher insurance rates, which applies to other insurance products like homeowners insurance and auto insurance.
     If you or your roommate file a claim that the insurance company agrees to reimburse you for, the claims payment usually goes to the policyholder. This can create an unpleasant situation, as you and your roommate will have to decide how to split the claims reimbursement.

​2. Liability protection extends outside the apartment.
     Renters insurance includes liability insurance, which protects people on the policy in and out of the house. That means by including a roommate on your policy, you are taking partial responsibility for your roommate’s actions in the sense that a liability claim against your roommate could affect your CLUE report.
     For example, if your roommate’s dog bites someone on a walk, the legal and medical bills could come back your way. Or imagine your roommate’s guest is injured in your apartment. Once again, the aftermath could result in a claim on your policy and show up on your CLUE report.

3. Unequal coverage needs. 
     Policy limits are shared between individuals on an insurance policy. That means if your policy has $25,000 of personal property coverage, $25,000 is the maximum amount the insurance company will cover — not $25,000 per person.
     You and your roommates’ coverage needs are likely to differ. For example, what if your roommate has a jewelry collection, but you don’t? Your roommate might want to add a jewelry endorsement to increase the coverage limit, but that will raise your rates. In cases like this, a combined policy can make splitting the cost tricky.

4. Removing your roommate can be difficult.
     If your roommate moves out, you’ll have to remove them from the policy. This can be a headache because you’ll have to negotiate new rates and coverage with your insurance company.

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