If you rent your house or apartment, having a renters insurance policy is a smart move. It can protect you from financial loss in the event of fire, theft, or another unexpected event.
But if you share your home with others, does renters insurance cover roommates? That depends on whether your roommate’s name is on the plan. If you and your roommate share a plan as policyholders, it will cover both of you. If not, your renters insurance will only cover you and, in some cases, your family members.
Here’s a closer look at how renters insurance coverage works in a home-sharing situation.
Key Points
• Renters insurance does not automatically cover roommates.
• Both roommates must be listed on the policy for coverage.
• Roommates should agree on premium payments and claim splits.
• A roommate’s claims impact claims history and future premiums.
• Shared belongings need joint decisions on coverage type and amount.
Understanding Renters Insurance and Roommate Coverage Basics
Renters insurance offers reimbursement for covered events, such as theft, fire, or a burst pipe. If you lose personal belongings to a robbery or vandalism, your plan should offer reimbursement. It may also pay for medical bills, legal costs, and other expenses if someone is injured on your property or you damage someone else’s property.
While this coverage can be a lifeline if you run into a challenging situation, it won’t cover your non-relative roommates unless they’re also on the plan. If you’re the sole policyholder, your renters insurance only offers coverage to you. However, some plans will also cover your spouse and any family members you live with.
If you and your roommate are able to share a plan, your renters insurance policy will provide coverage to both of you. In the event of a claim payout, the insurance company will make a check payable to both you and your roommate. You’ll both need to endorse the check to cash it.
Recommended: Does Renters Insurance Cover Injuries?
Can I Add a Roommate to My Renters Insurance Policy?
You may be able to add a roommate to your renters insurance policy, depending on the company policy and the state where you live. However, sharing renters insurance with a roommate can get tricky.
If your roommate moves or the relationship goes downhill, for instance, you’ll have to redo all the paperwork to change your plan. You’ll also need to be on the same page about who’s paying the monthly premiums and how to split any payouts.
In addition, you’ll need to review your belongings together to determine how much coverage you need. If your roommate has high-value items that require extra coverage, you may have a tough time figuring out how to split the monthly costs. This could also become an issue if only one roommate files a claim, which might cause the monthly premiums to increase.
Higher monthly premiums could add up significantly in the long run. It may be more cost-effective to get two separate policies, rather than intertwining your finances with a shared renters insurance policy.
Limitations and Exclusions Regarding Roommate Coverage
Not all insurance companies or states allow roommates to share a renters insurance plan. Most companies offer this option to family members living together, but they may have restrictions around non-related roommates who want to hop on the same plan.
Insurance plans may also have limitations when it comes to coverage of certain items. Most only pay out a few hundred dollars for stolen cash, for example. Your coverage for high-value items like artwork, jewelry, and electronics may also be limited to a certain dollar amount.
If you or your roommate want more renters insurance coverage, you may be able to add supplemental insurance or schedule individual items into your plan. This could get complicated, though, if one roommate needs more coverage than another.
You may end up in a dispute about how to divide the monthly bills or a payout from a claim. Plus, if your roommate files a claim, it will appear on your claims history record for the next five to seven years. This could mean you have higher premiums or even difficulty qualifying for coverage in the future.
Because of the complexity of sharing insurance with a roommate, many companies encourage you to purchase your own plans (or don’t allow roommates to share plans in the first place).
What Happens to Shared Belongings Under Renters Insurance?
If you and your roommate share a renters insurance plan, you’ll have to individually determine how to share payouts that come your way. You’ll also have to decide together how much coverage you need for your personal or shared belongings.
When it comes to personal property coverage in renters insurance, there are two main types: actual cash value (ACV) plans and replacement cash value (RCV) plans. An ACV plan will reimburse the amount that your belongings are worth currently, after accounting for depreciation.
If you bought a $900 laptop five years ago and it got stolen, an ACV renters insurance theft plan may only pay $300, or whatever the laptop is worth today. An RCV plan would pay back the full amount so you can replace the laptop.
RCV plans offer more coverage, but they also cost more. If you and your roommate share belongings, you can decide together how much coverage to get and which type of plan makes sense for you.
Recommended: How Much Is Renters Insurance?
The Takeaway
Your renters insurance doesn’t automatically extend to your roommate even though you share the same space. However, it may be possible to take out a policy with your roommate so you both have coverage. Sharing insurance with a roommate isn’t necessarily the best move, though. It could lead to disagreements about how to split renters insurance costs or when to file claims. You’ll also have to update your plan if one of you moves.
Rather than sharing a renters insurance policy, consider taking one out on your own. That way, you’ll be covered in an emergency event and won’t have to worry about getting into financial disputes with your roommate.
Looking to protect your belongings? SoFi has partnered with Lemonade to offer renters insurance. Policies are easy to understand and apply for, with instant quotes available. Prices start at just $5 per month.
FAQ
Does my policy cover my roommate’s belongings if they’re damaged?
Your renters insurance policy won’t cover your roommate’s belongings unless your roommate’s name is also on the policy. If you’re the sole policyholder, your roommate would be out of luck.
Can I add my roommate to my renters insurance policy?
You may be able to add your roommate to your renters’ insurance policy if the insurance company and your state allow it. However, sharing renters insurance with a roommate can get complicated, so it may be preferable to get your own individual plans.
What happens if my roommate causes damage or injury to someone?
Renters insurance plans offer liability coverage, which can help you if you accidentally cause damage or injury to someone. This renters insurance injury coverage won’t automatically extend to your roommate unless their name is also on the plan.
If my roommate steals from me, is that covered by my insurance?
Renters insurance generally doesn’t cover theft if the perpetrator is your roommate. It doesn’t cover items that were stolen by someone who has legal access to your home.
Is it cheaper to share one policy with a roommate?
It’s not necessarily cheaper to share one renters insurance policy with a roommate. If your roommate files a claim, your monthly premiums could increase, causing your long-term costs to go up.
photo credit: iStock/blackCAT
Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPRO-Q225-051