Does My Renters Insurance Cover A Roommate?

A policyholder's roommate is not covered by a renters insurance policy unless they are listed on the policy. In the event that a rental becomes uninhabitable, roommates are excluded from all renters insurance policy coverages, including personal property, liability, and loss of use. Each roommate should get their own renters insurance.

Why roommates are not covered

Because the policies are not priced appropriately for that risk, a roommate is not covered by another person's renters insurance. To price renters insurance for a single person, insurance companies consider a plethora of factors. The likelihood of a claim, or the severity of a claim, increases with each person covered by a policy.

Can I add roommates to my renters insurance policy?

Some companies allow policyholders to add additional people to their renters insurance policy, but this is generally not a good idea. Add a roommate to your renters insurance policy at your own risk.

If a roommate listed on a renters insurance policy files a claim, the consequences for the policyholder can be severe. All property insurance claims are reported to the Comprehensive Loss Underwriting Exchange (CLUE), a LexisNexis reporting system, and insurers use this database to price 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 reflect that claim in the future.

A higher renters insurance premium as a result of a claim on a CLUE report may not be significant. Higher homeowners or auto insurance rates, on the other hand, could result in a policyholder paying hundreds of dollars more per year.

The same could be said for a loss of use claim (also known as a claim for additional living expenses) if the apartment two roommates share becomes uninhabitable. If a covered peril, such as a fire, requires the roommates to stay in a hotel and eat out, this coverage will reimburse them for those costs.

Liability claims could differ. Remember that each claim filed by the policyholder taints their claim history, including claims filed by anyone else listed on the policy. Renters insurance liability claims are not as common as other types, but they are among the most expensive claims filed, and carriers take severity into account when evaluating rate increases and nonrenewals.

For example, a roommate may start a fire and be held liable for $100,000 in damages to a rental complex, but the policyholder is the one who files a claim. An insurance company is unconcerned about whether or not a policyholder was the cause of such a fire. Companies calculate risk based on the policyholder, the number of claims, and the severity of those claims — how those claims arose is irrelevant to them.

Roommates might save money with one policy, but it's not worth it

It is argued that listing a roommate on a renters insurance policy saves money. That savings is insignificant, and it is not worth the risk to the policyholder.

If two roommates split the cost of a renters insurance policy, they are only saving about $94 per year. In the United States, the average annual premium for renters insurance is only $187. You don't want to face years of higher property insurance rates as a policyholder because you had to file a claim due to your roommate.

Do not attempt to claim property that is not yours

Do not attempt to claim a roommate's personal property as a policyholder if they are not listed on your renters insurance policy. Filing an insurance claim for property you do not own is fraud, and insurance companies devote resources to detecting and investigating potential fraud cases.

If an insurer suspects a claim is fraudulent, he or she will frequently conduct an examination under oath. They usually hire outside counsel to conduct the examination, during which they ask the policyholder questions and request documents and receipts proving ownership of the property claimed.

Under oath examinations can be extremely broad, and if a policyholder does not cooperate in any way, insurance companies can deny their claim.

An examination under oath is typically administered by an attorney, but it can also be administered by an insurance adjuster.

Siblings, partners, students and college roommates

There are times when it makes sense for a policyholder to include someone on their renters insurance policy. The two most common situations are when a policyholder's roommate is a sibling or a girlfriend or boyfriend with whom they live.

If a policyholder is the legal guardian of a sibling who lives with them, the sibling should be listed on their renters insurance policy. An older sibling should get their own renters insurance policy, separate from the sibling they are staying with.

A policyholder who lives with a girlfriend or boyfriend may want to include them on their renters insurance policy as well. However, the policyholder should discuss this with their significant other. By including their boyfriend or girlfriend in their coverage, a policyholder may feel uneasy about taking on the risk of their boyfriend or girlfriend. Regardless of how two roommates get along, the policyholder is the one who stands to lose if a claim is filed.

College roommates

Renters insurance may be required for roommates at a college or university. Roommates living in a university-owned dormitory are likely covered by a parent or guardian's homeowners policy and do not require renters insurance. Roommates renting a house or apartment off campus, on the other hand, must each have their own renters insurance policy.