Individuals choose to have roommates for a variety of reasons. One of the main requirements when occupying a house is renter’s insurance cover. This form of home insurance includes one's belongings irrespective of the owner of the apartment. Renter’s issuance also protects belongings of individuals when they travel. Due to the importance attached to the home insurance, people are forced to seek ways of making the premium payments to insurance companies. There are various advantages and disadvantages attributed to sharing renters insurance with roommates.
Various shortcomings are attributed to sharing renters insurance among roommates. First, there are minimal cost differences between splitting an insurance policy and paying the entire amount exclusively. For instance, a tenant’s may have a $10,000 policy limit to cover the belongings. However, in situations where various individuals are sharing a room, the limit is likely to be raised to cover the belongings of all the roommates. Secondly, renters insurance is likely to curtail the process of moving out. This is due to the restrictions that have been placed by insurance companies to regulate the number of unrelated people that can share a single renter’s insurance policy. Issues are also likely to arise in terms of the most appropriate means of dividing the insurance payments among the roommates. According to the home insurance policy, assets of higher monetary value attract higher insurance premium payments. Individuals sharing an apartment may have belongings worth different values and as such, dividing the home insurance policy may be unfair to the one with relatively lower value belongings. This is especially the case when a claim is made.
Home insurance covers such as the renter's policy covers not only the personal belongings of the tenant but also physical injuries within the property insured. As such, an individual will only be liable to the extent of damage they inflict on the apartment during the period of the tenancy. On the other hand, the liability may extend to those not responsible for the actual harm. Consider a scenario in which one of the roommates throws a raging party, and in the process, the property is destroyed, and the owner proceeds to sue the tenants. Since the roommates are sharing the same home insurance policy, their ratings will be affected negatively. As such, sharing renters insurance means that the actions of one individual are transferred to others.
On the other hand, there are benefits to such an arrangement. One of the main factors that contribute to the sharing of home insurance premiums between roommates is affordability. The renter’s policy is considered to be more favorable in comparison to the insurance products. Despite the minimal charges charged by insurance firms for the renter’s policy form of home insurance, tenants may go to extra length to ensure that the minimize the costs involved. According to data provided by the National Association of Insurance Commissioners (NAIC), the average amount paid by tenants for the renter's insurance policy may cost between $15 and $30 per month. If two roommates decide to share the cost, each will be required to pay half of the original value thereby reducing the insurance liability.