September 15, 2018

Should I Add My Roommate onto My Renters Insurance Policy?

Adding your roommate to your Massachusetts renters insurance may be tempting. After all, who doesn’t want to save a few dollars each month by splitting insurance premiums? Including your roommate’s name on your renters policy has drawbacks, though. Here are some reasons why you might not want to add your roommate to your renters coverage.

Is Adding My Roommate onto My Massachusetts Renters Insurance Policy a Good Idea?

Your Roommate May Use Up Your Liability Coverage

First, by adding your roommate to your renters insurance policy, you’re granting them the same access to liability coverage as you have. They’ll be able to file liability claims against your policy if they need to, and any claims they file will count against your policy’s aggregate liability limit. Should this limit be reached, your policy may stop covering additional liability claims — which could jeopardize your coverage. (An aggregate limit is the total amount a policy will pay over the course of the policy.)

As an example, assume your renters policy has an aggregate liability limit of $500,000. If your roommate has a claim for $300,000, the policy would likely only provide an additional $200,000 worth of liability protection for the remainder of its effective period. Should you have a liability claim that exceeds $200,000 before the policy expires, you may be personally responsible for anything above the policy’s remaining protection.

Your Roommate’s Claim May Affect Your Future Rates

Second, even if a claim filed by your roommate doesn’t jeopardize your remaining coverage, their claim will probably increase your future insurance rates if you two share a policy.

Insurance companies in Massachusetts frequently consider past claims history when calculating premiums, and a claim filed by your roommate against your policy may show up on your claims history. As long as that claim remains in your claims history, which it might for several years, there’s a good chance you’ll end up paying more for renters coverage in the future.

Because any increase in premiums frequently lasts for a few years, an increase can easily exceed anything you might save by splitting your current renters coverage premiums with your roommate.

Collecting Payments for Claims Can Be a Hassle

Finally, collecting payment for a claim can be a hassle when another person is listed on your renters coverage.

In most cases, claims checks are written out to all people on a policy. Thus, a check for a claim filed against your renters policy would probably need to be endorsed by both you and your roommate if the two of you were on the policy together.

If you still live together when a check is written, depositing it may be as simple as signing it together and going to the bank. Getting your roommate to endorse the check so you can deposit or cash it might not be hard at all.

If your roommate has moved out, no longer talks to you or is angry about something, however, depositing a check from your insurer could be quite challenging. You may have to overcome logistical hurdles, such as mailing them the check to endorse and having them mail it back. Additionally, they might not be cooperative if they’re mad at you or disagree with your understanding of how the claim check should be split between you two.

Work with a Massachusetts Agent to Get Separate Renters Insurance Policies

You and your roommate can easily avoid these potential issues by each getting your own renters insurance policy. You won’t be able to split a policy’s premiums, but neither of you should end up paying too much for renters coverage. Most renters policies are very affordable, and an independent insurance agent can help each of you compare policies from different Massachusetts insurers. With an agent’s help, you’ll both be able to find an affordable renters policy that provides the coverages each of you need.

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