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Cohabitation and insurance: Separate but equal?

Sat Oct 20th, 2012 on     Homeowners Insurance,    

When the first results started to come in from the 2010 Census, one trend made the headlines more than any other, it seemed. The first decade of the 21st century saw a 5 percent increase in the number of households inhabited by two unrelated adults. The increase translates into one out of every eight homes, and for insurance companies that means a lot of new homeowners, renters and auto insurance policies.

Romantic partners or just strangers pooling resources, roommates have to decide how to protect their belongings. Not every insurance company offers a single policy to unrelated cohabitants, and not every state allows it. In Florida, in fact, the Office of Insurance Regulation’s “insurance types” list doesn’t even include renters insurance, much less information on whether the state has a one-renter/one-policy rule.

Renters insurance differs from homeowners insurance in some obvious ways. The best way to think about property insurance is to remember that it covers what you own. If a renter does not own the duplex or townhome or high rise where the apartment is, it is not the responsibility of the renter to repair a roof, for example, damaged by a tree. That would be the responsibility of the landlord, the person (or company) whose name is on the deed.

What if that falling tree damages a renter’s furniture? That is the renter’s problem. The renter owns that furniture and is responsible for repairs. If the apartment is uninhabitable after the tree takes out the roof, some renters policies will cover the cost of temporary housing while repairs are made.

While the property side of renters insurance is fairly straightforward, the liability coverage — the insurance that protects the renter if a third party is injured in the apartment — is not so straightforward.

We’ll explain further in our next post.

Source: Insurance Information Institute, “A Rise in Roommates Raises Questions about Home and Auto Insurance,” Oct. 5, 2012

Our Miami, Florida, law firm helps policyholders whose property insurance companies delay payment of claims for damages in situations like the example used in this post. If you would like to learn more about our practice, please visit the insurance disputes page of our website.

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