Potential renters insurance woes to be aware of
The number of people renting is increasing in the US. The 2016 NYU Furman Center and Capital One National Affordable Rental Housing Landscape study showed that the number of renters in the country increased by nearly 22 million between 2006 and 2014. The study also revealed that housing is becoming increasingly expensive for a majority of Americans. It is therefore not surprising to find two or more strangers renting out an apartment or house together.
The basic renter’s insurance policy will cost you about $188 per year according to the Insurance Information Institute’s poll for 2015. The poll found that while 95 percent of homeowners had invested in homeowner’s insurance, only 40 percent of renters had renters insurance.
While your landlord’s insurance protects their structure, you will not be included in the coverage. Renters insurance protects you and your belongings in case of theft, disaster or vandalism. If you don’t want to shell out thousands of dollars when disaster strikes, fork out a few hundred dollars annually toward renters insurance. The peace of mind will go a long way.
Can you share renters insurance?
Since you’re sharing a house with someone to split the bills, wouldn’t it make sense to share renters insurance to make it more affordable for you? The following are some things you should know about sharing renters insurance with your roommate.
- Your roommate doesn’t have to be on the lease in order to be added to your renters insurance policy.
- Insurance providers allow a maximum of two unrelated people to hold a single renters insurance policy.
- If you already have renters insurance, you won’t be charged a cent to add your roommate to the policy.
- The insurance premiums on your renters insurance won’t increase when you add your roommate unless you decide to increase your coverage.
Sharing renters insurance can help to keep the cost of insurance down. It is cheaper to have a single policy rather than have separate policies with two premiums.
What could go wrong?
Sharing a home with another person can be risky even when you believe that you know the other person well. Sharing renters insurance can be worse especially if the roommates aren’t on the same page. Even in arrangements that are amicable, problems can still arise with the insurance policy.
- If your roommate steals something from you, it won’t be covered. The same goes for intentional damage by your roommate. You’ll therefore have to foot the replacement or repair cost of anything you own that was stolen or damaged by your roommate.
- If your roommate hides their pet dog and it happens to damage property or bite anyone on or off the property, your insurance won’t cover the associated costs.
- If your roommate decides to invite a friend to live in your shared rented space, this third person cannot be added to your shared insurance policy. An additional policy will have to be taken out for this new roommate.
- If you file a claim, the check from the insurance providers will be made out to both policyholders. This means your roommate will have to co-sign it even if the damage was only to your belongings.
- If your roommate has more expensive items, you may be forced to pay higher on your premiums.
What to do?
If you want to share your renters insurance policy with your roommate, consider the following:
- Take inventory of your own belongings and know their worth. This will help in determining the level of coverage you need.
- Have an honest discussion with your roommate over insurance and how payment should be handled.
- Compare renters insurance quotesto find the best possible deal.
Sharing insurance may save you some cash, but may cost you down the line. Be diligent and ensure that you and your roommate consider all the pros and cons.