This is a great question and the answer of whether a non-married roommates can be listed on the same renter’s insurance policy depends on the insurance company’s eligibility guidelines.
Several insurance companies will allow non-married roommates to be listed on one renter’s insurance policy. The insurance company will either list both individuals as co-named insureds or list one as the named insured and other as additional named insured.
But the question you should ask yourself is:
Why isn’t it a good idea for non-married couples living together to have one renter’s insurance policy?
As long as your personal property is going to be fully covered, why would you both need a separate insurance policy? Yes, all of your belongings will be covered under the policy up to your personal property limit that is listed on the policy, this isn’t our area of concern.
Our concern is the liability portion of the policy. Essentially, you will be sharing the liability limit with your roommate on your renter’s insurance policy. And you might think, “that’s ok, the limit is $500,00, so $250,000 liability limit for me should be enough.”
Let’s take a step back, just because we stated that you would be sharing the limits does not mean that the limits are split equally between you and your roommate.
An example of this would be, someone gets hurt while you and your roommate are hosting a party at your apartment. A lawsuit gets filed and the injured party is suing you and your roommate for $500,000. You may think that you are still ok since the limit on the policy is $500,000 and should cover the lawsuit if the injured party wins their case. Your attorney advises you of the fine print, that the injured party is suing you and your roommate each for $500,000, and this is where our concerns come into play.
A few months later your roommate settles their portion of the lawsuit for $400,000. Your lawsuit remains open, but now there is only $100,000 of the liability limits remain for you. If you end up being found liable for $400,000, then you have a major weakness in your insurance coverage to the tune of $300,000. The renter’s policy you took out, will only respond, and pay the balance of the limits, which is $100,000. This would leave you responsible for the additional $300,000.
How do you resolve this policy weakness?
At R.C. Keller & Company, we always recommend that non-married roommates each obtain their own renter’s insurance policies. When you do this, you will not be forced to share the limits of your policy with your roommate. So if your liability limits are $500,000 then you will be covered for up to the full $500,000 if a covered lawsuit is filed against you.
How come married couples don’t have to buy two policies? Married couples can’t be named separately in a lawsuit. Therefore, the injured party will only be able to sue them both together and the limits will not be split between the two for the given incident. So one spouse could not use up the limits in the policy, leaving the other unprotected.
With that being said, if the married couple is sued for $1,000,000 and they only have $500,000 in liability coverage, there would still be a major weakness in their coverage that they both would be liable to pay.
Renter’s insurance is not that expensive.
When you deal with the right independent insurance agency, you can save yourself from hundreds of thousands of dollars in possible liability claims.
Please note we are not lawyers, and we are only writing about our experiences and knowledge of the insurance industry. Laws vary by state and insurance coverage varies by state and by insurance company. If you need legal clarification, please contact an attorney.
If you need clarification on your specific renter’s insurance policy, please contact your insurance agent or insurance company directly.
R.C. Keller & Company is an Illinois Trusted Choice Independent Insurance Agency. We are here to help with your insurance needs. If you have any questions, please give us a call at 847-907-4520.