The short answer: yes!
While it may seem cost effective to share one policy and split the cost, the long-term consequences can be far more damaging than saving a few bucks up front. Let’s look at the pros and cons for sharing a renter’s policy with your new roommate.
The cost of the insurance policy is split. This can be helpful to most people renting, and honestly you are more than likely splitting every bill, so why not split this one as well?
The downside is far heavier with points than the upside and there’s a reason for that.
The first thing to consider is what happens if you have to file a claim? For example, say someone broke into your rented home and stole the TV that belonged to your roommate. Your roommate then wants to file a claim for their stolen property. Your claims history will now show a theft claim. Or another common scenario to think about: your roommate has a dog and while the dog is super friendly with you and your roommate, a friend comes over and the dog bites your friend, who in turn sues your roommate for a liability claim. Your claims history will now show a liability claim related to a dog bite. The important thing to remember with claims history is that if it was filed on a policy that lists you as a named insured, it will follow you around whether or not it was your claim. These types of claims can affect your future home or renter’s insurance premiums and may make it difficult for you to get insurance in the future.
The second thing to consider is what happens if a roommate moves out due to a personal dispute or some type of life changing event? When you started the policy your roommate was more than willing to split the monthly cost of the policy, however, the person is now moving out and the two of you can’t stand to talk to one another. What if they decide to not help pay for the policy and the policy cancels and there is a final charge on the account? Are you willing to pay that whole amount or will you potentially not be able to afford it and now this unpaid bill goes to collection and affects your credit?
The third thing to consider is what happens if there is total loss at your home? As in, all of you and your roommate’s personal belongings are gone. How will you split the personal property coverage? 50/50? What if your roommate feels her belongings were worth more than yours and she wants more than 50% of the payout, but you feel like that is incorrect and unfair?
These scenarios seem far-fetched but they’re not. These situations arise between roommates on a regular basis. Our advice: have your own renter’s policy. Don’t risk a friendship or your financial future just to save $50-$70 a year.