Does My Roommate Need Renters Insurance Too?

A 2015 poll conducted by ORC International (Opinion Research Corporation) for the Insurance Information Institute (I.I.I.) estimates that, while approximately 95% of the homeowners in the United States maintain a homeowner's insurance policy, only about 37% of renters buy renters insurance coverage. This may be partly because when you buy a house by borrowing money from a mortgage provider, they'll require that you have homeowners insurance coverage in order to protect their financial interests in the home. Nobody requires renters to buy and maintain renters insurance.

What is Renters Insurance?

As a renter, the dwelling you occupy is most likely covered by your landlord's insurance, which protects the home or apartment from typical perils facing homeowners, such as fire, hurricanes, hail, lightning, etc., but what their insurance doesn't cover is your personal possessions. If the home is damaged or destroyed by fire, for example, the landlord's coverage will help pay to repair or replace the dwelling. Your personal possessions within the dwelling, however, will be a total loss unless you have renters insurance to help repair or replace them. Most renters coverage also includes protection against liability should someone suffer a loss in the home due to your negligence. You'll also be protected against theft, unless the theft is committed by your roommate.  

Coverage for Your Roommate

If you have a roommate, he or she can be added to your renters insurance policy or they can opt for their own separate coverage. If you add them to your policy, you may save money by splitting the premium costs, but if a claim is made and paid, the check will be made out to both of you. Even if only your possessions are lost, damaged or destroyed, the claims payment will be made jointly, and it'll be up to you to determine how to split it.
Likewise, if your roommate makes a claim, it will also show up on your personal insurance history, which could change your risk profile for buying future coverage. Additionally, if your roommate is faced with liability issues, with a joint policy you'll also be involved in the legal process.

With renters insurance, only those named on the policy will have protection. If you change roommates often, it might make sense to maintain your own policy, especially since rates are so reasonable. Saving a few premium dollars is really the only advantage to having a joint policy.

Insurance for Ride-Share Drivers

Ride-sharing has become increasingly popular all across the country, and Uber, especially, is making a real push to hire new drivers here in North Carolina. Making extra money by using your personal vehicle to give rides to strangers may sound like a great idea, but it's important to go into this arrangement with a complete understanding of the ride-sharing insurance implications you face. For many insurers, a personal vehicle insurance policy excludes coverage for drivers using their vehicles for commercial purposes, which is what driving for hire is considered.

Although ride-share companies, such as Uber and Lyft, legally defined as “Transportation Network Companies (TNCs),” provide a certain amount of ride-sharing insurance for their drivers, they have gaps in their protection that should be addressed. Consider these facts:

• Ride-share company coverage provides limited liability protection and no collision or comprehensive coverage while a driver has his or her ride share app turned on and is waiting for a fare request.
• If a fare request has been accepted and the driver is on the way to pick up that fare or has already done so, the company coverage includes both liability (typically up to $1 million) and collision coverage, but there's a significant deductible involved when making a claim.
• Uber and Lyft company ride-sharing insurance typically doesn't kick in until a driver's personal insurance policy fails to cover damages or losses. Many personal insurers may refuse to cover an accident and may even cancel your coverage when they find out you drive for a ride-sharing company, especially if you never notified them of your ride for-hire-working arrangement.

Fast Changes

With TNCs expanding rapidly all over, insurance companies and state insurance departments are taking a close look at this new type of transport business and how current insurance provisions affect it. Drivers can always obtain commercial vehicle insurance to protect themselves while performing ride-sharing activities, but this type of insurance may be too expensive for most drivers to easily afford. Fortunately, several top-name insurance companies are now offering ride-sharing insurance coverage to protect drivers and their passengers alike. The availability of this type of coverage varies state-by-state. but it is available in North Carolina and, more importantly, right here in the Triad region. If you're considering becoming a ride share driver, your trusted insurance broker should be able to answer your questions.

When to Drop Collision Coverage From Your Auto Policy

When buying car insurance, there are plenty of decisions to make regarding the types and amounts of coverage you add to your policy and also which insurer offers the best coverage at the most affordable rates. Seeking out a large number of quotes and comparing policies side-by-side is your best option, and finding a good Independent Agent or broker capable of providing you with multiple quotes makes this task much easier than attempting it on your own. Plus, a knowledgeable agent/broker can answer questions and clear up any confusion you might be experiencing regarding the ins-and-outs of the typical car insurance policy.

What You Really Need

All car insurance policies in North Carolina start with liability coverage, which is required of all drivers using public roads in the state. The minimum coverage mandated by law is 30/60/25, which translates to $30,000 maximum payout for bodily injury of one person per accident, $60,000 maximum payout for all bodily injury claims and $25,000 maximum payout for property damage. Liability coverage benefits pay nothing to you as the policyholder but only to others suffering a loss in a vehicle accident where you are found to be at fault.

It should be painfully obvious that these required minimum amounts are far below what the actual costs of an accident could reach, especially if multiple drivers are involved. Any bodily injury medical costs or property damage costs over and above the amount of your liability protection will have to come out of your pocket, which is why many drivers increase their liability coverage limits to much higher amounts, such as 250/500/100. Some drivers will opt to add an umbrella policy, which typically will have a limit of one million dollars, especially if they have significant assets to protect from being lost in a court judgment.

What you don't necessarily need is comprehensive or collision coverage, especially if you own a low-value vehicle that you could easily replace if it was totaled in an accident. When you total up the cost of collision coverage, which may be $500 per year, and add in the amount of your deductible should your car be damaged or destroyed, maintaining collision protection may not make sense. Unlike liability, the cost of a totaled vehicle is capped by its actual cash value. If you couldn't afford to replace your vehicle in the event that it's damaged beyond repair, collision coverage may be a worthwhile investment.