Mistake Made: Not Getting Renters Insurance When Living with My Roomie for a Summer

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

When I was in college, I moved in with my friend Megan for the summer. She had renters insurance, but I didn't have renters insurance in her apartment. 

Of course the unthinkable happened. The apartment building sustained a fire that summer! I'll never forget Megan sitting in the parking lot, moaning about her precious keepsakes and photos. Water and smoke damage ended up being our biggest problem, but luckily for me, my dad owned a dry cleaners and my clothes all ended up smelling normal in one giant load of laundry. 

You might wonder… Did she try to claim my stuff as hers? No! The last thing we wanted was to get in trouble for insurance fraud. (We were pretty good kids.)

So, how does this apply to you? What if you move in with a roommate into her apartment building, don't get renters insurance and the unthinkable happens? 

What You'll Face if Both You and Your Roomie Don't Have Coverage 

First of all, your roommate's renters insurance policy coverages including personal property, liability and loss of use in the event a rental becomes uninhabitable. In most cases, it does not include you, the roommate (similar to my situation when I lived with Megan).

1. Can I get added to my roommate's renters insurance policy?

Some companies will let your roommate add you to their renters insurance but this really isn't a good idea. Here's why: If you need to file a claim, your roommate could get penalized. The claim gets put into the Comprehensive Loss Underwriting Exchange (CLUE) reporting reporting system. Insurers check this database when they price auto and property policies and your roommate could end up with a higher renters insurance premium due to a claim on a CLUE report. You don't want to lose your roommate's friendship, do you?

2. Never encourage your roommate to claim property that is not theirs. 

Do not let your roommate claim your items on a renters insurance policy. You don't want to get mixed up in fraud. Insurance companies dedicate resources to detecting and investigating potential fraud cases.

Insurers frequently conduct an examination under oath if they suspect a claim is fraudulent. They usually hire outside counsel to administer the examination, during which they ask the policyholder questions and ask for receipts proving ownership of the property that your roommate claimed.

Insurance companies can use fraudulent claims to deny your roommate's claim.

3. Get in touch with Lemonade's dedicated team. 

Don't feel like you need to go through all this alone. You might want to submit questions to Lemonade so you and your roommate can assess how much coverage you need — and more importantly, can assess the pros and cons of sharing insurance with a roommate.

You can always get in touch with Lemonade's dedicated team of (fully human, really nice) licensed customer service agents. 

Why You Probably Want Your Own Policy 

Still waffling? You and your roommate might share clothes and groceries, but renters insurance might need to be the spot where you finally don't share. Check out some reasons to get your own policy. 

1. It's affordable.

The average cost of renters insurance in the U.S. costs about $14.90 per month, according to data from the Insurance Information Institute. However, Lemonade's renters insurance policies can start as low as $5 per month, which is about 65 percent lower than the industry average. 

Your actual cost will depend on how much coverage you need, the type of coverage you choose, the amount of your deductible and where you live. 

2. It covers losses to your personal property.

Your personal property gets covered — the major benefit. Think clothes, jewelry, luggage, computers, furniture and electronics. Don't think you own much? It adds up. Plus, who wants to pay out of pocket for things like a new bed? (My friend Megan had to get a new bed when our apartment caught on fire.) 

Your personal property would be covered against::

• Aircraft and vehicle damage
• Explosions and falling objects
• Fire, smoke or lightning
• Riots or civil commotion
• Theft, vandalism or malicious mischief
• Volcanic eruption
• The weight of ice, snow or sleet
• Windstorm or hail damage
• Damage from water or steam from household appliances, plumbing, heating, air conditioning or fire-protective sprinkler systems

Note: Renters insurance doesn't cover flood damage, earthquakes and hurricanes. You need to get a separate policy or rider for these perils. Renters insurance policies also do not cover negligence or intentional acts. Check out the list of situations covered by renters insurance at Lemonade.

3. Your landlord doesn't cover it.

Your landlord's insurance covers the structure itself and the grounds, but not your belongings. Plus, you might need it anyway. An increasing number of landlords expect to see proof of renters insurance.

Steps to Getting Renters Insurance with Lemonade

Lemonade gets you a renters insurance quote online within minutes — you don't have to leave your couch! AI bot Maya walks you through the sign-up process so you get the renters insurance coverage you need, often at a fraction of the price of old-school insurance companies. 

Step 1: Download the Lemonade app. 

Easy peasy.

Step 2: Follow the (very fun) prompts. 

Indicate whether you already have insurance with Lemonade. Next, you'll go to a screen that says, "I'll get you an awesome price in minutes. Ready to go?" 

Submit your name, address, and birthday and whether you have fire alarms or burglar alarms. Not only will they keep you safe, they often lower the price of your renters insurance policy. 

Make note of any particularly high-value items (that expensive vase you bought on whim included!), as most insurers will only provide coverage for such items up to a certain dollar amount listed within the policy. Because of these limits, you'll usually be able to purchase additional coverage for those more expensive items. It's always helpful to have receipts or appraisals on hand for valuables.

Step 3: Select your coverage amounts.

Select your coverage amounts! The minimum personal property coverage amount will be $10,000 and can increase from there. 

You'll also be asked to select a limit for liability coverage and this limit usually begins at $100,000 and can be increased if you need. 

In most cases, you'll also be asked to choose a deductible, the out-of-pocket amount you pay before your insurer pays a claim. Let's say someone steals your $1,000 washer and dryer. (I mean, it could happen.) If your deductible is $250, your insurance company pays you $750. 

Get Covered and Breathe Easy with Lemonade

Megan and I ended up finding another apartment for the rest of the summer. Did I learn my lesson? Yep, I did. I got a renters insurance policy and double-checked with the landlord to make sure I could, indeed, live there. (Another thing I failed to do before I moved in with Megan — oops.)

The horror of watching our apartment burn down made us renters insurance ambassadors. We warned everyone we knew about getting renters insurance — and that was in the days before social media. Do you think we would've posted about our experience so others could learn from us?

You bet.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.