If your roommate borrows your car sometimes, you may be wondering if they should be added to your car insurance.
Car insurance alleviates a lot of the financial risks of owning a car. It’s also a significant financial safety net that protects one of your biggest assets, which is your vehicle.
Today, we’re looking at the advantages and disadvantages of putting your roommate on your car insurance policy!
Should You Share Car Insurance With Roommates?
Having roommates can help cut housing costs. But did you know sharing auto insurance might also save you money? Listing roommate(s) who are on your lease as drivers can provide certain benefits. However there are risks to consider before adding them to your policy.
This guide explores the pros and cons of having roommates on your car insurance. We’ll also look at factors to evaluate beforehand.
Who Counts As a Roommate?
For insurance purposes, a roommate is usually someone who lives with you and is listed on the same rental agreement or mortgage. This includes:
- Spouses
- Significant others
- Adult children
- Friends
- Relatives
Someone staying with you temporarily who’s not on your lease would not be considered a roommate by insurers. The specifics can vary by state and company, so verify the rules with your insurer.
Can Roommates in General Share Car Insurance?
The short answer is yes, roommates can share an auto insurance policy. All regular drivers of your vehicles should be listed for coverage when operating your car.
Here are key points about having roommates on your policy:
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All drivers must be listed on the declarations page to have coverage.
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Listing a driver does NOT make them part owner of the policy. The policyholder maintains full ownership.
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Roommates can be listed as a Primary Named Insured OR just as Additional Insureds/Drivers.
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Discounts like multi-car and good driver can lower rates when roommates are added.
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However, negative factors like accidents, tickets, credit, and age can increase premiums
Carefully weighing the pros and cons is important before sharing a policy.
Pros of Adding a Roommate to Your Car Insurance
- Multi-Car Discounts
Most insurers offer a discount for insuring multiple vehicles on one policy. Adding a roommate who owns a car can unlock these savings. Discounts range from 5% to 15%+ depending on the carrier.
- Good Driver Discounts
Does your roommate have an excellent driving history? Adding them could qualify you for a good driver discount up to 10% or more off premiums.
- Shared Policy Costs
Dividing expenses like premiums and deductibles between roommates makes costs more affordable per person.
- Shared Vehicle Usage
Adding roommates allows both parties to easily drive either person’s vehicle if needed. This provides flexibility.
- Quick and Easy
It’s simple to include roommates on an existing policy. This avoids the hassle of obtaining separate insurance.
Cons of Putting Roommates on Your Insurance
- Increased Rates
Roommates with any negative factors like accidents, tickets, DUI’s, poor credit, etc. may cause insurers to raise rates or drop you.
- Shared Limits
Policy liability limits are shared by all insureds. Large claims by roommates could tap available coverage.
- Loss of Discounts
A roommate’s accident could make you lose certain discounts, resulting in higher premiums.
- Higher Premiums
Certain risk factors like age, gender, poor credit, and sports cars can sometimes increase costs more than savings.
- Shared Driving Records
All listed drivers’ records impact overall premiums. A roommate’s poor driving will penalize your rates.
Carefully weigh both pros and cons before sharing a policy.
What Factors Impact Premiums on Shared Policies?
Adding roommates can either raise or lower your costs depending on these key rating factors:
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Driving Record – Clean records get lower rates, while accidents and tickets raise premiums.
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Credit History – Insurers check the credit of all listed drivers. Poor credit leads to higher premiums.
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Vehicle Type – Sports cars or specialty vehicles can increase insurance costs.
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Age and Gender – Younger drivers and males often have the highest rates.
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Marital Status – Married drivers get lower premiums than single drivers.
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Years Licensed – More experience equals lower premiums in most cases.
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Mileage – High mileage drivers have more risk exposure so rates are higher.
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Multi-Car Discount – Insuring multiple vehicles on one policy lowers premiums.
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Multi-Policy Discount – Bundling home and/or life insurance with auto saves money.
Have roommates provide their license and basic info to get quotes with them listed. This allows you to assess the rate impact before deciding.
Tips for Saving Money on Shared Car Insurance
If you add your roommate, here are some tips to keep rates low:
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Compare quotes listing roommates as both named insureds and just drivers to find the lowest cost.
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Only add roommates who own vehicles to take advantage of multi-car discounts.
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Verify all available discounts and calculate if savings exceed any roommate risk factors.
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Consider raising deductibles to at least $500 or $1000 to lower premiums.
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Drop optional coverages if roommates have risk factors to reduce costs.
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Use discounts like multi-policy, good driver, defensive driving, good student, and pay-in-full.
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Have all drivers be extra careful to avoid accidents, tickets, violations, or claims.
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Review discounts and coverages with agents at renewal to maximize savings.
Alternatives to Sharing Car Insurance with Roommates
If adding your roommate increases premiums, consider these alternatives:
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Be Listed as Excluded Drivers – Tell your insurer your roommate won’t drive your vehicles. This leaves them without coverage but protects you if they drive without permission.
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Purchase Non-Owner Car Insurance – Your roommate can buy a non-owner policy to cover them when driving your car. This leaves them off your policy.
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Occasional Driver Endorsement – Some insurers allow listing roommates as occasional drivers for lower premiums if they rarely drive your car.
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Buy a Separate Policy – Your roommate can get their own policy if they regularly drive your vehicle. No need to share a policy.
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Daily Rental – Have your roommate rent vehicles as needed instead of regularly driving your car. Rental insurance will cover them while driving.
Carefully examine all options to find the most affordable way to insure both parties.
Frequently Asked Questions
Can unmarried couples share car insurance?
Yes. Marital status does not matter. Any roommates on the same lease can be on one policy.
Do all household members have to be listed?
Only regular drivers of your vehicles need to be listed. Occasional residents don’t need to be.
Can you remove a roommate from your policy?
Yes, inform your insurer anytime a roommate moves out to remove them from coverage.
Does each roommate need their own insurance?
No, roommates can share a policy but make sure all regular drivers are listed. Separate policies are also an option.
Should roommates get separate policies?
If a roommate has high risk factors, separate policies may be better to avoid shared risk and keep your rates lower.
How to Evaluate Roommates on Your Policy
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Have roommates provide driver’s licenses, vehicles, and basic information.
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Get quotes listing roommates as named insureds and just drivers. Compare costs.
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Analyze discounts like multi-car savings vs any roommate risk factors.
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Consider alternatives like excluding roommates or separate policies if costs increase.
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Choose the option providing the best coverage at the lowest combined rate.
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Inform insurer when a roommate moves out to remove them from the policy.
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Review discounts and alternatives at renewal to optimize savings.
The bottom line is roommates can share car insurance policies. But careful evaluation is key to ensure savings and adequate protection. Discuss options with insurance agents or experts to make the best choice. Use our free tool to compare personalized quotes by entering your zipcode.
Things you should consider when adding someone to your policy
There is a lot to consider when shopping around for an insurance policy. Think about all of these things before deciding if you want to add your roommate to your car insurance!
It can be hard to save money on car insurance. However, if you add your roommate to your car insurance, you can easily save money. This is because they may have good credit, a clean driving record, or a car that is cheap to insure.
You could also pay a higher rate for the exact opposite reasons as those mentioned above. This might happen if your roommate has bad credit, a history of bad driving, or a car that is expensive to insure. Because of this, it’s important to think about these things to see if you can get the best rate.
Most car insurance companies offer multi-car discounts. You can use that feature, but your roommate must also have a car for you to get a discount for having more than one. Before you say it’s a good financial move, you should make sure the multi-car discount is worth it. This is especially important if your roommate has bad credit or a bad driving record.
If your roommate has accidents that hurt their driving record while they are on the same car insurance policy as you, you may not be able to get discounts. Say your roommate gets into a fender bender and receives a speeding ticket as a result. Your car insurance company will lump the two of you together, meaning you’ll be penalized as well.
Pros and cons of roommates sharing car insurance
There are many advantages and disadvantages of adding your roommate to your car insurance. Let’s weigh the pros and cons!.
The most significant advantage of adding a driver to car insurance is the savings potential. There is usually a discount for having more than one car, so if your roommate is a good driver, has good credit, or just owns their own car, they could save you money. It also gives you and your roommate more options because you can use each other’s cars while living together.
The main bad thing about adding your roommate to your car insurance is that it might cost you more. In terms of how much it costs to insure, it may be more expensive if your roommate has bad credit, a past DUI, or a more expensive car.
You could also be dropped from your policy completely based on how your roommate drives. So you need to evaluate if adding your roommate to your policy will benefit you.
[Guide] How to Find Insurance with a Roommate | Renters Resources
FAQ
Can roommates be on the same car insurance policy?
Can two friends share car insurance?
Can you share insurance with someone you live with?
Can roommates share a car?
Can a roommate drive a car if he gets in an accident?
No, as long as your roommate won’t be driving your car. If your roommate drives your car at all, even occasionally, you’ll want to add them as a driver on your car insurance policy. Depending on your insurer, your vehicle may not be covered if your roommate gets in an accident and isn’t listed as a driver on your policy.
Can roommates share car insurance?
Many insurers, including Progressive, allow roommates to share car insurance. If both cars are kept at the same address overnight, you can share a policy, even if you drive different vehicles or don’t share a last name.
Can a roommate get a multi-car discount?
You’re usually covered when driving each other’s cars. With some insurers, including Progressive, roommates can get a multi-car discount for having more than one car on a policy. If your roommate has violations on their motor vehicle report, a lower insurance score, or drives an expensive car, the cost of your individual policy could increase.
Does my former roommate need a car insurance policy?
Your former roommate will need their own policy because their vehicle will be kept at a different location. They can stay on your policy as a covered driver if they continue to borrow your car, but the roommate’s vehicle must be removed from your policy. Log in to your policy or call 1-866-749-7436 to add your roommate.