Do I have to add room renters to my car insurance?

If you want to ensure that your car is covered in any possible accident, then you should notify your car insurance company of any possible licensed drivers in your home that could potentially use your car. Most tenants will have their own car and insurance so this shouldn't be an issue. A person renting a room could possibly use your car someday even if they themselves don't own a car. They may need it for an emergency or other critical needs and may ask you if they can borrow it.

Here's where it gets tricky. If you don't let your insurance company know about your room renters and one of them gets in an accident, then the insurance company may be able to use this to deny your claim entirely. Someone living with you is more likely to end up using your car. If a friend who doesn't live with you borrows your car and gets in an accident, then your insurance company will likely pay the claim if needed.

The best course of action is to be up front with your in home tenants with your insurance agent. Ask him or her if it is required to add them to your policy. What they decide depends upon state laws and your insurance company's guidelines.

Non-owners car insurance as a requirement on the lease

One way to minimize this cost or risk to your car insurance company is to make it mandatory that all live in tenants have liability insurance coverage. This can lower the risk to your insurance and keep a financial liability buffer between you and your tenants. The lease can state that your live in tenants MUST purchase and show proof of an active personal liability car insurance policy (either owners or non-owners car insurance) and must purchase general liability coverage. Since it's a state law for all licensed drivers to have this minimum liability car insurance , then it shouldn't be an issue when it comes to legality in the lease. General liability coverage can also be purchased as part of a renters policy or separately. These policies are very inexpensive (typically $10-$20 per month for $300,000 in general liability coverage). Making tenants have this insurance as a requirement in rental leases is becoming very common. Ensuring tenants have at least $300,000 in general personal liability coverage is typical. If they don't like this part of the lease, then they can find another room. You have to protect yourself.

Be sure to tell your personal car insurance agent that you are requiring your live in tenants to have these insurance coverage's as part of the lease and give them a copy of signed leases and copies of their liability insurance declarations pages from each tenant.

Want to compare renters and personal liability insurance rates and get the best deal?

If you would like to compare renters insurance rates with additional personal liability coverage, then we suggest that you compare policies and rates from as many insurance companies as you can prior to buying a policy or switching companies. We recommend Insureme who allows you to compare several renters insurance policies from major highly rated insurers. They are also unique in that they include quotes from dozens of local independent insurance agents in your area. In many cases, independent agents may be able to give you a better deal for becoming one of their customers.

This article makes general legal suggestions that may not be appropriate in your situation. THIS IS NOT LEGAL ADVICE. We suggest you consult with an attorney who specializes in landlord tenant law. This should also not be considered financial advice which can only be given by a qualified financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.

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