Sharing renters insurance with roommate is one option to save costs in the near term, but it's not a recommendation that should be made in every situation. Although many insurance providers will let you include a roommate on your policy, you should first consider the benefits and drawbacks of having combined renters insurance coverage.

Risks

Several insurance firms are willing to provide renters insurance to roommates; however, no assurance doing so would result in cost savings in the long term. Say you and your roommate have joint insurance coverage, and your roommate chooses to file a claim. The claim will show up on your insurance record for up to seven years, regardless of whether or not you were at fault for the incident. Findings from the rate study indicate that having a claim on your record might lead to a 20% rise in your premiums.

An additional risk exists if your roommate is liable for the insurance bill but fails to make a payment, as explained by TJ Roberts. Roberts has spoken thusly from personal experience.

According to the findings of a rate investigation, the average annual premium for renters insurance is $168, which breaks down to $84 per individual when two people share a living space. Sharing insurance coverage isn't worth it only to save $7 per month.

Even among the most friendly housemates, difficulties may develop. For instance, one factor determining the cost of insurance is the aggregate worth of all your possessions. What happens, though, if one roommate possesses more costly goods than the other, pushing up the cost of the policy? It seems wrong to divide the premium in half like that.

Additionally, roommate circumstances are sometimes subject to change due to employment or other possibilities. If you have a roommate who moves out before the end of your policy term, you may need to reapply for insurance or renew your already-used policy.

Janet Ruiz says, "If you're somebody who moves every year or two, you may want to have your own insurance simply." You won't have to change your insurance coverage if one of you moves because of this arrangement. According to Ruiz, though, it is more likely to make sense to share a policy if you are in a serious relationship with your roommate and you co-own the majority of the furniture and other things in the home.

Tips

Here is what you should do first if you and your roommate have decided to get renters insurance coverage together.

Evaluate your roommate

Are they complete strangers you just happened to meet on Craigslist, or are they someone you've known for a very long time? Do you believe they will pay their bills on time and divide the funds they get for claims fairly?

Take stock of what you own

Roberts suggests making a video inventory of everyone's possessions, including capturing the contents of all closets and drawers and each room. Using this information, you and your roommate can evaluate how much coverage you need and the worth of your belongings. If a tragedy occurs, you must have an inventory to collect all the claim money to which you are entitled.

Have an open and frank conversation with your other roommate

"When would be a decent date for us to be billed? What kind of a spending plan would work for us? In terms of coverage, what are some of the things that we should be looking for?" According to Roberts. "Those are topics that you will most certainly want to discuss." Another subject to consider if one of you has more goods than the other is how the insurance claim money would be split if a fire destroyed your house and all that was within it.

Talk to an agent

An insurance professional can help you determine how much coverage you need and discuss the benefits and drawbacks of sharing insurance with a roommate or other individual.

Ask about bundling

It is always a good idea to inquire about savings with an insurance company or agent, regardless of whether or not you share a policy. Because of reductions offered when several policies are purchased together, purchasing renters insurance and an existing vehicle policy may be surprisingly cost-effective. For instance, the money you save on your auto insurance can reduce or eliminate the additional expense of purchasing renters insurance coverage.