Renters insurance policies that include roommates or significant others aren’t usually recommended, since if one person on your policy files a claim, that will appear on both records and cause problems down the road.
Shared policies may have an effect on coverage limits, liability coverage and deductibles.
Coverage Limits
If you live with roommates, purchasing renters insurance together may seem like an effective way to cut costs. Unfortunately, joint policies can often become more complex than necessary and therefore, unless married or related, it would be more prudent for each of you to obtain your own individual policies.
A standalone policy gives you the flexibility to tailor coverages according to your unique needs and budget. For instance, you could increase personal property coverage, raise the deductible amount, or add extra liability coverage – plus specific protection for jewelry pieces! Also consider adding an endorsement that increases the value of your belongings!
Assuming you own a shared policy, all individuals on it typically share equal personal property and additional living expense limits. Therefore, to make sure your combined possessions exceed this amount you must create a home inventory listing each item worth the value you assign it – models or serial numbers of highly valuable objects (i.e. jewelry) can even be included herein!
Add up the value of all of your belongings to find their combined total. Furthermore, take into account what would happen if something were to get lost – this can be done by searching websites such as eBay or Craigslist to compare prices.
One major drawback of having a shared policy with your roommate is that any claims filed by them will appear on both of your records, potentially hindering future attempts at finding affordable coverage if either of you ends up splitting.
Joint policies can become complicated if your roommate files an unexpected claim that doesn’t involve you; as the homeowner, you could become responsible for any repairs or replacement costs and premiums could increase due to this liability.
When it comes to renters insurance, individual policies are always preferable over group policies for several reasons. Apart from their many benefits, individual policies will eliminate roommates who are less responsible or trustworthy, saving both you and them much hassle in the process.
Additional Living Expenses
If you are considering purchasing renters insurance for three people, it’s essential to understand how it works. Typically, people purchase individual policies for personal property and share liability coverage equaling what could be sued for (a minimum of $1 million is recommended). Furthermore, additional living expenses coverage provides hotel costs or any related costs should your apartment become uninhabitable due to an act such as fire or tornado.
Your personal property coverage provides an allotted amount for each person’s belongings. To assess the value of your belongings, take an inventory and adjust other forms of coverage as necessary – for instance if you find that they exceed the limit in your policy you could increase this limit or add an endorsement.
Addition of roommates can be tricky with renters insurance policies, and must meet several conditions in order to be valid. First, ensure your state and insurer allow it; often insurers won’t permit an additional insured unless they are related (spouse or relative). Furthermore, adding non-related roommates could result in higher premiums as well as creating complications when making claims or changing roommates later on.
Another difficulty lies in the difficulty of identifying who should be covered under your policy, without prior agreement among roommates, it can be challenging to know which belongings fall under its scope and who claims them as their own – this can be especially troublesome when dealing with expensive items that both of you claim as belonging solely to themselves, which could create friction within relationships and may ultimately create conflict over ownership issues.
At the end of the day, getting individual renters insurance policies may be your best bet for ensuring individual coverage as well as individual limits for liability coverage and to prevent disputes down the line if a claim needs to be filed.
Liability Coverage
Many renters purchase renters insurance to protect their personal belongings against damage or loss and to cover liabilities for injuries and property damage they cause, such as broken windows caused by accidents or even apartment parties. Your policy might also cover you if your home becomes uninhabitable due to disaster and you need to find somewhere else to live temporarily.
Liability coverage on a renters policy can be especially critical for college students. According to a 2021 NerdWallet study, 23% of students who purchase renters insurance do so solely for its liability coverage alone. While a standard policy won’t cover your possessions or liability issues directly, you can add an optional personal property rider which provides protection for both.
A typical renters policy provides up to $100,000 of personal property coverage between two people on the policy, split evenly. You may increase this limit if there are valuable items you wish to cover, and can add a home inventory system that helps determine their worth.
Upgrade your policy with replacement cost coverage of your personal property to ensure if something is destroyed or stolen, your insurer will cover enough to purchase a brand-new replacement rather than simply reducing their payout based on original cost plus depreciation. Another popular upgrade is flood coverage; while standard renters policies usually don’t include it, most providers or even the National Flood Insurance Program offer separate flood policies as additional options.
Bundling multiple policies from one carrier and installing security features like fire or burglar alarms, smoke detectors and deadbolt locks can save money; many insurers also offer discounts if these features are installed. Sometimes agreeing to an increased deductible could even bring down the premium further. Furthermore, insurance providers often provide discounted rates to renters who take other steps to lower risk, like making one lump payment instead of monthly installments.
Home Inventory
Standard renters insurance provides protection for personal property that has been stolen or damaged and any liabilities you incur should anyone be injured while in your apartment. In addition, this coverage often offers temporary relocation benefits when your place becomes inhabitable due to covered disasters, as well as temporary loss-of-use benefits when your home becomes inhabitable due to covered disasters. Some providers also provide add-on coverages such as high-value items or water backup.
To accurately assess how much personal property coverage you require, it’s advisable to create a home inventory listing all your possessions and their estimated values. An app can make this task simpler and save a copy for use if ever you need to file a claim; make sure your list includes dates of purchase, serial numbers and appraisal documents as this will allow for quicker filing processes should a need arise. It would also be prudent to update it whenever new items arrive as well as taking photos/video of everything in case necessary.
When searching for an insurance policy, be sure to collect quotes from at least four or five providers in your area. Take note of their coverage limits, deductible amounts and customer satisfaction ratings in order to select the ideal policy option for yourself. You can also check online reviews of insurers to get an instantaneous measure of customer service quality.
Some renters insurance providers focus on technology-enabled applications to sign up, manage, and file claims easily and user-friendly apps like Lemonade are particularly popular with millennial and Gen-Z renters for offering on-demand coverage starting as low as $5 monthly.
If you live with roommates or two, separate policies for personal property and liability coverage could help avoid disputes over reimbursement in case of an incident or claim, as well as prevent misunderstandings if either needs to submit proof of purchase for items bought during an incident.