Is Renters Insurance Per Person?

Have you been thinking in this direction – “Is Renters Insurance Per Person?”

Some companies allow policyholders to list other individuals to their renters insurance policy but this is widely ill-advised. Do not add a roommate to your renters insurance policy. Insurance companies use a long list of factors to price renters insurance for only one individual. For each person a policy covers, the likelihood of a claim, or the severity of a claim, increases.

Is Renters Insurance Per Person?

According to Valuepenguin

Can I add roommates to my renters insurance policy?

Some companies allow policyholders to list other individuals to their renters insurance policy but this is widely ill-advised. Do not add a roommate to your renters insurance policy.

If a roommate listed on a renters insurance policy ever needs to file a claim, the ramifications for the policyholder can be serious. All property insurance claims made are registered to the Comprehensive Loss Underwriting Exchange (CLUE), a reporting system by LexisNexis, and insurers check this database when pricing personal auto and property policies (including renters insurance). So if a roommate listed on a renters insurance policy files a claim, the policyholder will be the one reported to the exchange and their CLUE report will show that claim going forward.

READ: When Do You Need Renters Insurance?

A higher renters insurance premium due to a claim on a CLUE report might not equate to a lot of money. However, higher homeowners or auto insurance rate could mean a policyholder is paying hundreds of dollars more each year.

NOTE: It’s recommended that every tenant get their own renters insurance policy. Renters insurance will only cover the person listed as the policyholder, or anyone related or married to them.

Tips For Sharing Renters Insurance With A Roommate

If you decide to buy a renters insurance policy with a roommate, here’s what to do first.

  1. Evaluate your roommate. Are they a stranger you just met on Craigslist or someone you’ve known for years? Can you trust them to pay their bills on time and split claims checks equitably? Think carefully before linking your finances and insurance history to someone else’s by sharing a renters policy.

2. Take stock of what you own. Roberts recommends taking a video inventory of everyone’s belongings, recording each room and the contents of all closets and drawers. This will help you and your roommate calculate the value of your stuff and determine how much coverage you need. In addition, having an inventory is essential to getting all of the claim money you’re entitled to if disaster strikes.

3. Have an honest discussion with your roommate. “What’s a good billing date for us? What’s a good budget for us? What are the things that we’re looking for as far as coverage?” Roberts says. “Those are things you definitely want to hash out.” Another question to consider if one of you has more possessions than the other: If a fire destroyed your home and everything inside, how would claim money be divided?

4. Talk to an agent. An insurance agent can assess how much coverage you need and talk you through the pros and cons of sharing insurance with a roommate.

READ: Can Renters Insurance Be Transferred

5. Ask about bundling. Whether you share a policy or not, it’s always smart to ask an agent or insurance company about discounts. Adding renters insurance to an existing auto policy can be surprisingly affordable, thanks to bundling discounts. For example, the savings on your car insurance could be enough to minimize or even negate the cost of adding a renters policy.

 

Renters Insurance With Roommate Coverage Limitations

The lowest available personal property coverage level on a renters policy is usually $10,000. If your apartment were to burn down, you and your roommate would split that $10,000 of coverage. After a claim, there is nothing you can do to increase your coverage. A workaround is to increase your personal property and liability coverage levels.

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