Does Renters Insurance Cover Flood Damage?

As one of the most common natural disasters on earth, and one of the most commonly filed home insurance claims, floods have a distinctive place in the name of home insurance. They aren’t considered a covered peril under any renters insurance policy. Although many people don’t know that, and they haven’t the faintest clue what is and isn’t covered when it comes to flooding. Let’s take a look at everything renters need to know about flood damage.

No, renters insurance doesn’t cover any sort of flood damage if it was caused by a natural disaster or a source that comes from outside your home. So you wouldn’t be covered if a nearby body of water overflowed into your home, a hurricane caused a storm surge, or rain piled up in your yard and seeped into your home.

You must purchase flood insurance separately to ensure you’re covered. It’s also important to note that any mold damage that results from floods isn’t covered by your policy either.

However, renters insurance does cover certain types of water damage that may result in a flooded home, such as burst pipes and plumbing leaks that damage your belongings. Or a renters insurance flood policy would likely kick in if a hurricane rips off your roof, allowing water to flood into your home from above.

That’s because your policy covers hurricane damage and, since the hurricane was the reason rain is now pouring through your roof, it would be considered water damage instead of flood damage.

Renters insurance, just like every other home insurance policy, doesn’t cover flood damage because it’s the most common peril on earth, it occurs nearly everywhere in the United States, flooding is extremely unpredictable and flood damage can get expensive very quickly.

Yes, renters can get flood insurance through a private insurer or the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program. Coverage will typically be issued for up to $100,000 worth of personal property protection, which can reimburse you for damaged personal belongings like furniture, clothes and electronics.

Since renters don’t own the property in which they live, their renters insurance solely protects their belongings from damage (as well as liability concerns and additional living expenses if they’re forced to temporarily move out of their home due to a covered peril). So flood insurance policies for renters are a bit different in that they only provide protection for the policyholder’s belongings.

FEMA has created a list of designated flood zones across the country, which help to determine how likely a flood will hit your area. Depending on what sort of risk for flooding your rental property has, you may either be able to choose between a private insurer or, if you’re at a high risk, you may have to go with the National Flood Insurance Program.

Private insurers and agents, like Clovered, are licensed to sell flood insurance policies to anyone. However, since the cost of flood damage is so high and there are many areas in the country where a flood is likely to occur at least once every 30 years, private insurers are very particular about who they do and don’t cover.

The pickiness, while smart to mitigate risk, has caused some issues in the past with people not being able to secure coverage. So in 1968, the government created the National Flood Insurance Program (NFIP) to address the need for flood insurance to those people who couldn’t secure a policy from a private insurer.

The NFIP provides a policy to anyone who needs one. However, policies come with reduced coverage compared to private insurers. The NFIP typically caps coverage for personal belongings at $100,000 per claim. Since flood insurance for renters includes coverage for their personal belongings and doesn’t include coverage for the rental property, you shouldn’t have an issue securing a policy from the NFIP that covers all your personal belongings.

Since renters insurance with flood coverage doesn’t exist, and floods occur at happenstance across the U.S. and can be extremely costly, it’s recommended that every renter invest in flood insurance if they live in a rental house or in an apartment or townhome that’s located on the first through third floors.

If you live above the third floor in your building, you may not need flood insurance because the likelihood of floodwaters reaching your unit is quite rare. However, it can happen, so those living on the third and fourth floors may need to address their situation and local flood zone to see if purchasing a policy is necessary.

Also, just like a landlord can require you to purchase renters insurance, they can also require you to purchase flood insurance in some instances. Even if your landlord doesn’t require flood insurance, we strongly suggest you invest in a policy if you live on the first through third floors.

Depending on which flood zone you live in, renters may purchase a standard policy from a private insurer or FEMA’s National Flood Insurance Program. However, the amount and types of coverage you may receive from each insurer are a bit different.

Personal Property Flood Coverage: Personal property flood coverage is offered through both private insurers and the NFIP. It’s designed to pay to repair or replace the personal items you keep inside your home, such as furniture, electronics and clothes, if they’re damaged or destroyed by a covered peril.

If you get a policy through a private insurer, you can likely get as much personal property coverage as you need (although you probably don’t need too much). If you get a policy through the NFIP, the maximum coverage you can get is $100,000.

Your personal property coverage needs to match the value of all your belongings. So if you have $20,000 worth of possessions, you only need $20,000 worth of coverage. It’s important to create a home inventory list of all your belongings to figure out how much coverage you need.

Your flood policy can either come equipped with replacement cost or actual cash value coverage. Replacement cost simply reimburses you the exact dollar amount you paid for the item, while actual cash value coverage takes depreciation of the item’s value into account. Private insurers allow you to choose between both forms of coverage, but an NFIP policy only offers actual cash value coverage.

Loss of Use Flood Coverage: Loss of use flood coverage is designed to reimburse you for additional living expenses if your home sustains flood damage and you’re forced to temporarily move out while it’s being repaired. This coverage can reimburse you for things like a hotel stay, extra gas money for longer commutes and food since you may not be able to cook at home.

Flood insurance policies from private insurers offer renters the choice to include or exclude loss of use coverage, but NFIP policies don’t cover any form of additional living expenses.

Getting flood insurance for renters is simple and quick by using Clovered’s online flood insurance quote form. We’re licensed to sell flood insurance from both private insurers and the National Flood Insurance Program, so you always get the best policy at the best price. Simply enter a few details about your living situation and we’ll customize a policy that fits your needs and budget.