Living with roommates makes a lot of things cheaper, such as rent, utilities, and other independent living costs. However, one thing it can make more expensive is car insurance.
If you have roommates, your insurance provider likely wants you to add them to your policy as covered drivers. This will raise your rates by about 10–15 percent, but it offers financial peace of mind should an accident occur when they drive your car. If you’re trying to figure out whether you should add your roommate to your car insurance, read on. We’ll discuss the pros and cons of the decision, along with some other valuable information.
The Pros of Adding Your Roommate
- Potential discounts for multiple drivers
- Simplified coverage when car sharing
- Peace of mind in case of an accident
Adding your roommate to your car insurance can come with several benefits. Firstly, if you and your roommate frequently share a car, adding them to your policy simplifies coverage, ensuring that the vehicle is always protected regardless of who’s driving. Also, if you share a car, then adding your roommate to your policy can lower insurance premiums because some insurance companies offer discounts for multiple drivers under the same policy.
Adding your roommate also grants peace of mind. If an accident occurs while your roommate is driving, you won’t have to worry about potential coverage issues or out-of-pocket expenses beyond your deductible.
The Cons of Adding Your Roommate
- Increased premiums
- Financial liability
On the downside, increasing your policy to include your roommate will lead to higher premiums that can feel unnecessary if your roommate rarely—or never—drives your car. These costs become higher if your roommate’s driving record is less than stellar, as their higher liability gets factored into your rate.
Should You Add Your Roommate?
Whether you should add your roommate to your car insurance depends on your individual circumstances.
If you and your roommate share a vehicle, the obvious and correct choice is to add them to your policy. This will most likely result in a lower rate for both of you, regardless of your roommate’s driving record, as you will split the cost.
Likewise, if you frequently trust your roommate with your vehicle, it can be a wise decision to add them to your policy. Even if they’re an excellent driver and you want to keep your premium as low as possible, accidents can still happen. Having them on your policy can provide peace of mind and cover you financially.
However, if your roommate doesn’t have access to your vehicle, adding them might be an expensive way to protect yourself from a nonissue. This is especially true if you live with multiple people. Adding multiple people who never drive your car to your policy will drive up your premium even though the coverage isn’t applicable to your situation.
A Note on Excluded Driver Policies
Excluded driver policies let you specifically list people (i.e., roommates) who you expressly deny coverage and access to your vehicle. This allows you to not pay an increased monthly premium for your roommates, but it provides zero protection if they end up using your car.
This can be a good option if you do not allow your roommates to use your vehicle, especially if they’re high-risk drivers who would up your premiums by a lot. However, it’s important to compare auto insurance quotes because not all states offer excluded driver policies, and if they do, costs can still vary. Do your research to find the best possible price without compromising valuable coverage that is relevant to your situation.
