Do Roommates Need Two Separate Renter's Insurance Policies?

Much like homeowner's insurance, renter's insurance covers the loss or theft of items such as furniture, clothing, stereo equipment, bicycles, appliances and other personal property. Renter's insurance also provides liability coverage, protecting you if you are sued. Additionally, most renter insurance policies will provide for medical bills if someone is injured while on your premises.

Some insurance companies allow joint property renters to purchase a single policy. When purchasing a joint insurance policy with your roommate or roommates, find out if that policy will cover all of your combined material possessions. State laws may limit your ability to purchase joint coverage. Because a renter's insurance policy is also a liability policy, consider whether you trust your roommate enough to enter into a legal agreement with him or her. After all, if your roommate ends up being sued due to an irresponsible act, that legal suit will affect your insurance rating. If a roommate moves out, you face the added hassle of removing his or her name from the policy that cannot be done without his or her written consent. Likewise, claims checks that are paid out from a mutual renter's policy are addressed to all insured parties, requiring multiple signatures before they can be cashed.

Most insurance companies encourage roommates to obtain separate insurance policies. This can be tricky because the property being insured is often bought in common, such as the big screen TV that was purchased by the pooling of mutual funds. In some cases, it will be necessary to divide given assets and assign them to specific roommates for insurance purposes. However, the advantage of having separate policies is that you are responsible for your insured items only. You do not need to track and report what your roommate buys to your insurance company. If your roommate has expensive tastes, reporting these additional purchases can even result in your insurance rate premium going up. Likewise, if your roommate destroys or steals any property that you defined as yours, you are within your rights to fully sue him or her.

What if your roommate is your domestic partner? Many insurance companies do extend coverage to domestic partners, but the methods by which a domestic partner is defined differ. Also, coverage amounts can differ significantly from one insurance company to another. Incidentally, insurance companies define a roommate as someone who is not related to you either by marriage or family affiliation and with whom you share a residence. Therefore, your spouse is not your roommate, and you do need to take out two renter's policies if you are married.