Renters insurance is a great way to ensure yourself against possibilities of thefts or vandalism. You may never know it, but things may take an ugly turn any time. During that time, every bit of money you get from your claim may make a huge difference. However, come to think of it and the term is itself quite an oxymoron. If you are renting a place, can it be assumed that you have sufficient money to spend on every beneficial thing? No. Hence, though it seems like a good idea, people often find it difficult to afford renters home insurance.
A good way our of this conundrum is sharing the renters insurance with you roommate. It is pretty common. Many people have tried it, some with great results while some with only moderate success. In order to get a better view, let us have a look at some pros and cons of sharing your renters insurance.
Pros
1. Sharing of costs: Needless to say, the biggest positive. In fact, some sources will tell you that this is the ONLY positive of sharing your renters insurance. We cannot totally disagree with them. If not the only positive, it is, no doubt, the dominant reason for taking the concept seriously. Also, sharing does lead to a savings. Over the years, this has made renters insurance affordable for many people!
2. Individualized policies for each persons: A big issue with sharing is that you are bound by the terms preferred by your roommate. You are sharing the insurance, after all. However, there are some insurance schemes in which you can get customized policies for each person. So, you can independently craft out a policy for yourself without worrying about your roommate.
3. Better rental spaces: Good rental spaces will often make a renters insurance mandatory. Hence, it might have been impossible for you to rent one in case you couldn't afford the insurance. Not any more! With shared renters insurance, you can bring down the costs while still having the badge of the insurance on yourself.
4. A great idea for the right situation: If both of your assets are of almost equal value and you would be staying together for quite some time, it might turn out to be a great idea. Most of the disadvantages of sharing you insurance are due to asset imbalances and short stays!
Cons
That was the brighter side. However, there is a flip side too. In some cases, these can lead to serious confrontations. Moreover, it may not always be the right thing to do.
1. Asset imbalances: This is a major problem associated with sharing insurance costs. One of you might have his wedding ring in the flat while the other may just have his laptop to insure. This makes a huge difference. Valuables lure thieves and drive up insurance costs. Hence, the premiums need to be divided accordingly. Moreover, even the claims will have to be divided up in this fashion. These situations can lead to sour relationships if not handled well.
2. Uncertainty: How long would your roommate be with you? What if he suddenly keeps that wedding ring in a bank locker and has nothing left to insure? What if he cannot afford the rentals anymore? There are a number of situations like these which can offer. Taking care of them will require clear terms from the onset and a great deal of understanding.
3. Your track record is no more yours: Yes, every claim made by your roommate will now figure in your history too. So, what if your roommate throws a wild party which leads to some ugly claims? It downgrades his rating, which is well deserved. However, it severely impacts your credibility too. That claim will stick for the entire length of your life on your history.
4. Split up the claim too: This is one of those situations where it might not be a good idea to share the insurance. If you can afford an individualized policy and have some real valuables to insure, it is better to go your own way. The claims in a joint policy will be almost half of what you can get otherwise. This may defeat the entire of purpose of getting an insurance in the first place.
To be really honest, it really depends on the kind of position you are in. If you are really cash strapped and do not have high valuables to insure, this may be a good idea. If you can afford to get it on your own account, why take an unnecessary burden? Besides, renters policies have become really affordable these days. Along with some discount coupons, you may not feel any pocket pinch at all!
