Roommates and insurance: what you need to know
Whether apartment-sharing is a lifestyle choice or a stopgap, living with roommates is an excellent way to share household expenses and responsibilities, including the rent, the electricity bill, and even groceries and housework. But what about insurance? Read on to find out.
To insure or not to insure?
Picture this: You forget to turn off the faucet, and the sink overflows, damaging the floor of your apartment and the ceiling of the apartment below. Depending on the circumstances, you may be liable for the repair costs, which can run quite high. With civil liability coverage, you could avoid this type of unforeseen expense. It’s included in all home insurance policies, including tenant’s insurance, and protects you if you’re held liable for damages involuntarily caused to a building or another person.
Tenant’s insurance is also a great way to protect your belongings if they are damaged by fire, stolen or vandalized—even if they’re being stored elsewhere. An inventory of your personal property will tell you how much coverage you need to replace it.
How to take an inventory of your belongings
- Make an itemized list of your furniture and belongings, along with their retail value. Here’s a helpful tool from the Insurance Bureau of Canada to draw up this list. You and your roommates should each complete your own.
- Update the list once a year or whenever you buy something new (mobile phone, clothing, home decor items, etc.).
- Keep the receipts of more valuable items.
- Take pictures of your belongings.
Insurance policy: one for all, or to each their own ?
You may be inclined to rely on a roommate’s insurance coverage to save a few dollars—bad idea! If something happens, you won’t be covered.
Several roommates can be included in the same policy, but it’s not ideal either. While sharing the cost may seem like a tempting proposition, there are risks involved. A claim filed by your roommate could have an impact on your file.
The safest solution is for each roommate to have their own insurance—preferably with the same company to simplify the claim process.
In any case, having tenant’s insurance protects you from major expenses you hadn’t counted on. Contact your broker to determine which tenant’s insurance plan best suits your needs in the event the unexpected happens.
Are you covered by your parents’ insurance?
If you’re a full-time student who must temporarily move out of the family home to be closer to school, you may be considered a dependant, in which case—depending on your parents’ home insurance policy—your personal property and civil liability coverage may be included.