You share a roof — but should you share car insurance with your roommates?
Living with a roommate is common. Car insurance for roommates is fairly straightforward, although rules and considerations may vary by car insurance provider. Some insurance companies require all driving-age individuals sharing an address be added to the policy as a rated driver or an excluded driver. If your roommate is not listed as a rated driver, e.g., covered by the policy, the insurance company hasn’t had a chance to evaluate them as a risk — or rate them for that risk.
If your roommate won’t be using your vehicle, you don't need to add them to your car insurance policy. Some insurance companies might take issue with a household member, i.e., someone living at your listed address, not being listed on your policy. Car insurance companies want any driving-aged individual living in a given household to be either clearly covered or not. If your roommate won't drive your vehicle, your insurance company may require you to explicitly list them as an excluded driver.
While adding an excluded driver to your policy should not impact your premium, it does mean your roommate won't be covered if they are involved in an accident while driving your vehicle. If your roommate is listed as an excluded driver on your car insurance policy, do not let them use your car.
Most policies will allow you to add any driver who lives in the same location as you to your policy. Below are key reasons to add your roommate your car insurance policy.
When you add your roommate and their vehicle to your policy, you may become eligible for multi-car and multi-driver discounts. While the policy premium may increase, it will be proportionally cheaper than everyone covering their vehicle on separate policies.
If you add your roommate to your policy, you can share your vehicles. If your car breaks down and you need to borrow your roommate's vehicle for a week, you will be covered in the event of an accident. If you are listed as an excluded driver, you wouldn’t have coverage and couldn't drive their car.
Alternatively, it could make sense to keep your car insurance policy separate from your roommate's.
If your roommate isn't going to use your vehicle, there's no reason to add them to your auto insurance policy. Adding another driver — even your roommate — will increase your premium.
If your roommate has a bad driving record, i.e., lots of at-fault accidents or citations, your bill will be higher if they're on your policy. Keeping your policy separate would avoid your being penalized for their driving mistakes.
Most insurance companies — in most states — use credit score as a factor to set premiums. A low credit score can negatively impact car insurance premiums.
All other metrics constant, a driver with "excellent" credit (800-850) pays $744 less than a driver in the "very poor" credit tier (300-579).
If you drive a Toyota Corolla but your roommate drives a Lamborghini, you should expect a significant difference in your premiums. Your insurance company has to account for the financial risk of insuring such a high-value car by charging an expensive premium. If you’re worried about footing the bill for their fancy car, consider sticking to your own policy.
There are a few reasons not to share renters, homeowners, or condo insurance with a roommate, but it’s generally a good idea. Not only can you earn a discount on your car insurance policy (if you bundle policies within the same company), you can lower your overall bill by splitting it with your roommate. See below typical discounts from bundling your policies.
Why not to share renters insurance with your roommate
If you’re worried about your own liability, sharing a renter’s insurance policy might not be a good idea. Any claim your roommate makes on your shared policy will impact your premium.
Furthermore, you'll share limits on your coverage. If your and your roommate’s belongings are destroyed, you might exhaust the personal property policy limits on your coverage prior to having all your belongings replaced.
If you're like more information on condo, home, and renters insurance, see our guides below:
The primary consideration for car insurance when you have a roommate is the common requirement to either add your roommate or exclude them from your policy.
If you’re worried about your roommate's driving profile increasing your premium, explicitly exclude them from your policy. If, however, you and your roommate want the ability to share vehicles or be eligible for a discount, you should add them to your policy. At the end of the day, the best way to save on auto insurance is to shop around for car insurance — with or without your roommate — every six months.