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When do I need more than one renters insurance policy?
You might need more than one renters insurance policy if you rent more than one apartment long term. (Meaning that you plan to maintain both leases, and aren’t in the process of moving.)
For instance, you may spend a lot of time in two different cities and have a separate residence in each one. Or, you may have a second apartment where you stash your pool table and game consoles. In cases like these, it might make sense to take out a separate renters insurance policy on each unit.
Renters insurance covers items stored off-premises, which means you can cover the items in your second residence with just one policy. However, items stored off-premises usually only receive 10% of your total personal property coverage.
In other words, if your policy covers the property in your primary residence up to $30,000, it’ll only cover the property in your secondary residence up to $3,000. This is why, if you have a lot of valuable possessions spread across multiple apartments, it can make sense to get two policies.
Sharing coverage between two kinds of insurance
However, depending on what items you need to cover in your secondary residence, it might make more sense to take out a different type of insurance rather than a second renters insurance policy.
For instance, if the most valuable item at your other residence is a boat that you keep in the garage, it might make more sense to take out a boat insurance policy instead.
How this works: proportionate coverage
When you file a claim for an item that’s covered by two insurance policies, each policy will pay out an amount proportionate to its share of the coverage.
Let’s say that your renters insurance policy covers your boat up to $1,000, and your boat insurance policy covers it up to $3,000. In total, you have $4,000 of coverage for that boat. If an accident does $600 worth of damage, your renters insurance company would pay out $150, since your renters insurance comprises one-fourth of your boat coverage. ($150 is one-fourth of $600.)
Note that in situations like this, you’re legally obligated to disclose your boat insurance to your renters insurance provider. Failing to do so and attempting to collect the full $600 reimbursement from your renters insurance would be illegal.
Do I need more than one renters insurance policy if I’m moving?
When you move, you can usually transfer your renters insurance policy to your new unit, which means there’s no need to buy a second policy. Contact your insurer and ask:
- If they cover your new neighborhood
- Whether your coverage and/or premium will be different
We’ll talk about what to do if you can’t transfer your renters insurance — like if you’re moving to a new state that your insurer doesn’t cover — a little further down. If you bought your renters insurance policy from a local or regional insurer, that might happen, but if you got it from a large, name-brand insurer like Allstate or State Farm, it’s unlikely.
Renters insurance covers moving
Your current renters insurance policy will fully cover you while you move. Even though normally, items stored outside your residence premises only receive 10% of your personal property coverage, most policies include a 30-day “grace period” during which both your old and new residence are both fully covered.
Just keep in mind that all the normal coverage rules and limits still apply. You’ll only be reimbursed for damage that occurred due to what insurers call a covered peril, like theft or fire. If you (or your movers) drop the box containing your wine glass collection, your renters insurance won’t pay for it, because in most policies “accidental damage” isn’t a covered peril.
That said, if the movers cause the damage, their insurance should cover it. When you choose a moving company, make sure to pick one that’s willing to show you their insurance certificate.
What if I can’t transfer my renters insurance policy to my new address?
If you can’t transfer your renters insurance policy, you’ll need to purchase a new one from an insurer that covers your new neighborhood.
Try to buy your new policy before you cancel your current renters insurance. This helps you avoid gaps in your coverage, which are risky. It also keeps you from violating your lease if your landlord requires you to have renters insurance.
Buying a new policy before you cancel your current one means that technically, you’ll temporarily have two policies. However, it’s a very temporary situation, and you can still only file one claim per incident, even if the damage occurs while you hold both policies.
Why you shouldn’t usually have more than one renters insurance policy
Unless you rent more than one apartment, there’s usually no reason to have more than one renters insurance policy. It means paying two premiums for no real benefit.
Again, you can’t legally make claims with multiple insurance companies for the same incident. That’s a form of insurance fraud, and it can get you into a lot of trouble. If your possessions are worth more than your current insurance policy will cover, ask your insurer about purchasing more coverage instead of taking out a second policy.
Does every tenant, like my roommates or family, need renters insurance?
If you’re wondering if you should hold more than one policy to cover your roommates or family, you shouldn’t.
In general, unless your “roommate” is actually a family member or your spouse, you should both buy your own renters insurance policy. Conversely, if you live with a family member, your existing policy probably covers them by default.
If you have roommates
Your renters insurance doesn’t automatically cover your roommate. You can choose to add them to your policy, but most experts recommend that you don’t.
First of all, unless you and your roommate are minimalists, there’s a good chance a single renters insurance policy won’t cover both of your things. If your possessions are both destroyed in a fire and your policy doesn’t fully cover them, whose possessions go unprotected?
Also, if either of you files a claim, it will go on both parties’ insurance records. That could drive your premiums up in the future.
The bottom line is that doubling up on insurance can get messy, and given the low cost of renters insurance, there’s usually no need to share a policy.
If you have a spouse or family members
Renters insurance usually covers your spouse and any immediate relatives who live with you, even if their names aren’t on the policy. Family members are more likely to share financial liability and valuable possessions than unrelated roommates, so it makes sense for one policy to cover the entire family.
This includes any minors who are living under the care of any covered family member. If your brother moves in with you and brings his 16-year-old son, both of them are insured under your policy. However, your brother’s new girlfriend would not be covered.
If you’re not sure about who your renters insurance covers, check your policy. It should explicitly outline who it covers in one of the first sections, which will probably be labeled “Definitions” or something similar.