How having a roommate impacts your homeowners insurance coverage

Your homeowners insurance does not cover your roommate. Their belongings, their injuries and their liability are all excluded. A standard policy covers you and the relatives who live with you, and an unrelated adult paying rent doesn’t qualify no matter how long they’ve lived there.

A roommate changes your own coverage too. Rent counts as business income once it clears $2,000 a year, so a third roommate strips out your liability protection for the rental, and an arrangement you never told your insurer about gives them grounds to cancel. Both gaps close the same inexpensive way — one call to your agent, and a renters insurance policy in your roommate’s name.

Does homeowners insurance cover my roommate?

Homeowners insurance covers you and the relatives who live with you, which leaves your roommate with no coverage under your policy at all.

Here’s what that means:

• Their belongings are never covered. Your policy lists property of roomers, boarders and other tenants under Property Not Covered. A fire that destroys their laptop and furniture is their loss.
• Your medical payments coverage doesn’t cover their injuries. Coverage F excludes anyone regularly residing on the premises other than a residence employee. If your roommate slips on your stairs, it pays nothing.
• Theft from the space you rent them is excluded. The theft peril excludes losses from the portion of a residence premises rented to someone who isn’t an insured.
• Time doesn’t fix it. Insured status requires a family relationship, so a roommate of ten years is no more covered than one of ten days.

Can I add my roommate to my homeowners insurance policy?

Adding a rent-paying roommate to your homeowners policy usually isn’t possible. The industry endorsement for adding a non-relative to your coverage is called Other Members of Your Household, and it draws its line based on whether the person pays you rent.

Here’s who that endorsement can and can’t cover.

• A live-in partner can be added. Significant others and domestic partners are exactly who the form was written for.
• A rent-paying roommate cannot. The endorsement applies only to a person who is not a guest, residence employee, tenant, roomer or boarder. Rent makes your roommate a roomer.
• Your insurer may not offer it at all. Some companies write their own forms rather than the standard one, so availability and terms vary.

Talk to your agent before you take on a roommate so you know where your policy stands.

How many roommates can you have before it affects your homeowners insurance?

A standard homeowners policy allows up to two roommates per family unit. A third roommate can cost you both your liability coverage for the rental and your homeowners policy itself.

Here’s what changes at each count.

• At one or two roommates, nothing changes. Rent counts as business income once it clears $2,000 a year, and your policy excludes business activity. But an exception protects you for renting part of your home as a residence, and that exception holds at two.
• At three, your liability coverage for the rental disappears. The exception applies only up to two roommates. Past that, the business exclusion takes over and nothing covers you for the rental.
• At three, your home may also lose homeowners eligibility. Eligibility rules generally cap a family unit at two roomers or boarders. Your home may need a dwelling policy instead.

Do you have to tell your insurance company about a roommate?

You should tell your insurer before your roommate moves in, because an undisclosed tenant gives your carrier grounds to cancel your policy and gives an adjuster grounds to deny your claim.

Here’s what’s at stake.

• Your insurer can cancel your policy. Carriers can cancel a policy that’s been active 60 days or more when the risk changes substantially, and a paying tenant counts.
• Hiding it can void coverage for everyone in the house. If you intentionally conceal or misstate a material fact, your policy can wipe out coverage for every insured on it, including family members who had nothing to do with the answer.
• Telling them gets your lost rent covered. Your policy includes Fair Rental Value coverage, which pays the rent you stop collecting when a covered loss makes the rented room unlivable. It only applies if your insurer knows the room was rented.

Should your roommates get their own renters insurance policy?

Every roommate needs their own renters insurance policy, and it protects you at least as much as it protects them.

• It covers their belongings. Your policy never will, so this is the only thing standing behind everything they own.
• It gives them liability coverage. They’re covered if someone gets hurt because of something they did.
• It shields you from a subrogation claim. If your roommate leaves a burner on and the kitchen goes up, your policy repairs the house and your insurer can then pursue your roommate for the money. Their liability coverage absorbs that claim instead of your friendship.
• It applies whether or not you own the home. If you’re sharing a rental, each of you still needs a separate policy.

Should roommates share one renters insurance policy?

Each roommate should buy a separate renters policy, even at insurers that allow a shared one.

Here’s what a shared policy costs you.

• You get one set of limits, not two. Your belongings and your roommate’s both draw down the same contents limit, and both of you draw down the same liability limit. Separate policies give each of you a full limit.
• You have to split one deductible. A claim means deciding who owes what, usually right after something has already gone wrong.
• Their claim raises your rate. Anything your roommate files lands on your record and follows you to your next policy.
• A shared policy won’t protect you if your roommate sues you. A policy never pays for injuries to its own insureds. Put your roommate on yours, and the coverage sits out the day they get hurt and come after you. On separate policies, they’re a third party your liability coverage defends you against.

What happens if your roommate has a pet?

A dog you don’t own can still become your legal problem, because liability follows the premises as well as the owner.

• Breed restrictions apply regardless of who owns the animal. Many insurers restrict or surcharge certain breeds, and they don’t ask whose name is on the vet bill.
• You can be sued for a bite by a dog that isn’t yours. Knowledge of the animal’s history is what creates the exposure.
• Disclose the pet when you disclose the roommate. An insurer that would have declined the risk won’t be more sympathetic after a claim.

What homeowners insurance covers when you have a roommate

Your homeowners policy covers your home, your belongings and your liability to others. It does not cover your roommate’s belongings or your roommate’s injuries, and it stops covering the rental altogether once you take in a third roomer.

Coverage varies by insurer and state, so read your own policy language beforehand.

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