You already know renters insurance is a good idea, but when you're sharing an apartment, do both roommates need renters insurance?
There's something special about a good roommate. It can be like living with your best friend. You share special movie nights, throw the best cocktail parties, and have a friend to chat with when you want a quiet evening. You share the bill for electricity and cable and groceries. But what about your stuff? Do both roommates need renters insurance?
What is renters insurance and what does it cover
There are certain perks you get when you rent an apartment. If your refrigerator stops working, your landlord replaces it. If a pipe bursts and floods your kitchen with two inches of water, it's your landlord's responsibility to fix it. When your neighbor forgets to turn off the oven and your apartment gets fire, smoke, and water damage as a result, your landlord is on the hook for repairs to the apartment.
There's just one problem with this. When your refrigerator stops working, your food goes bad. When a pipe bursts in your kitchen, your kitchen rug and anything else close to the floor gets wet and is destroyed. When your apartment gets smoke damage, so do your clothes, your books, your sheets, and everything else. Neither your landlord nor the liability insurance on the building covers your stuff.
Renters insurance, on the other hand, does help you recover those losses. Renters insurance will help you replace your belongings, pay living expenses, and take care of medical expenses resulting from accidents or disasters.
The specific details of a policy will fluctuate, but the overarching theme is protection. Renters insurance protects you from a major financial hardship in the event of unfortunate circumstances. If you live in a multi-family apartment or a loft building, your chances of others in your building leaving their stove on or tipping over a candle will multiply.
You live with a friend; do both roommates need renters insurance?
This is easy enough to figure out when you live alone. You talk to your insurance agent, decide on a policy that suits your needs, and that's it. When you have a roommate and you share so many other expenses, what should you do with renters insurance?
Renters insurance covers your belongings and acts as a liability insurance policy in case you are at fault for property damage or an injury. There are pros and cons to sharing this coverage with a roommate.
The biggest benefit to sharing renters insurance with a roommate is saving money. Like everything else you share with your roommate, you can cut your insurance premium in half when you split it. However, this won't save you very much. The monthly rate for a typical renters insurance policy is about the same price as a few lattes.
Aside from some possible convenience, though, there are few other benefits to sharing a renters insurance policy.
Why both roommates should get renters insurance
There is a very simple reason you don't want to share renters insurance with a roommate: money. If you and a roommate share a policy, any reimbursement checks are made out to both of you, and your bank will require both of you to sign the check. That might not be a problem if you and your roommate are best buddies. It will be a problem if your roommate is hiking through Peru for the next six weeks. Likewise, if your roommate moves away and is still on the policy, you'll need to track her down to sign any insurance check you receive.
Things can get messy when you try to divide a check, too. If you lose everything in a fire or you're the victim of theft, it isn't just a matter of splitting an insurance check in half. You'll need to determine a percentage split based on the replacement value of your belongings. That's a difficult task under the best of circumstances, and it's also the kind of thing that can strain a friendship.
Given the minimal expense of renters insurance and the difficulty of sharing a policy, we think it makes sense for both roommates to have their own policy.
Renters insurance provides the coverage you need to replace possessions, protect against liability, and pay medical expenses. It also offers security in the event of theft, fire, and other events. Don’t be caught unprepared; contact your local Pekin Insurance agent now for a renters insurance policy.
Do you share a renters insurance policy with your roommate? How is it working out for you? We'd love to hear your ideas.