Insuring your belongings provides a powerful sense of peace of mind if you rent a house or property. By purchasing renters insurance, you can feel confident that you will receive financial compensation for your valuables in a disaster, such as a fire. However, despite its broad protection, renters insurance does not protect you in all scenarios.
In fact, renters insurance often doesn’t cover damage caused by natural disasters. Because the various regions of the U.S. pose distinct natural threats, determining which is pertinent to your location could help you better cover your belongings. For those in low-lying areas, flood insurance should be top of mind. Floods are often not covered by traditional renters insurance plans, leaving you without protection if one strikes. Thankfully, getting coverage for floods is straightforward and affordable. Read on to learn more.
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Does Renters Insurance Cover Flood Damage?
Renters insurance won’t cover damage to your possessions from flooding. Renters insurance policies are only bound to cover the perils, or scenarios, found within the contract, usually not including floods. Examples of perils include theft, specified natural disasters, and water damage from plumbing.
Additionally, renters insurance does not cover everything you own without limits. Here are some of the standard items and thresholds included in a standard renters policy:
- Personal liability if you cause damage or an injury
- The approximate value of your belongings (up to a specified limit)
- Temporary housing if your apartment is unlivable
- Water damage from internal issues (bursting pipes, water heaters)
- Wind damage
Therefore, if the damage to your house is not listed above, you will pay out of pocket if a disaster, such as a flood, damages your items.
When Does Renters Insurance Cover Flood Damage?
Although it doesn’t cover flood damage, renters insurance reimburses you for some types of water damage. In general, if the water comes from outside the house, it isn’t covered by renters insurance. It won’t reimburse you for flood damage from a storm surge or a sewer backup.
However, renters insurance covers damage from a plumbing leak or burst pipe. This coverage is for your personal property. Any damage to the building is the responsibility of the landlord.
What Is Flood Insurance?
If a storm brings currents of water, flash floods, storm surges, or similar flooding, flood insurance covers the loss of your possessions. In the U.S., 90% of damage to properties from natural disasters is caused by flooding. Considering how pervasive flood damage is, it’s not just those in high-risk areas that can experience it. Over 25% of all flood claims come from people living outside high-risk areas.
Flood insurance for renters is a separate policy you can buy to cover flood damage. You can buy flood insurance through the National Flood Insurance Program (NFIP) or privately. However, the best way to ensure complete protection against flooding is to purchase flood insurance in addition to renters insurance.
What Does Flood Insurance for Renters Cover?
Flood insurance for renters covers damage to your personal property from a flood. Covered items include:
- Curtains and window blinds
- Window or portable air conditioners
- Portable microwave ovens and dishwashers
- Washers and dryers
- Valuables, like jewelry, up to $1500
- Freezers and the food within
Renters flood insurance won’t cover structural damage to your apartment as that is the responsibility of the building’s owner. Additionally, renters insurance does not cover cash or valuable documents.
Does Renters Flood Insurance Cover Possessions in Your Basement?
Because items stored in a basement are at higher risk, coverage for things stored in a basement is more limited. Renters flood insurance covers a few items, such as washers, dryers, and freezers. It doesn’t cover personal property like couches, televisions, or clothing. Therefore, even if you have renters flood insurance, to protect all of your belongings, you’ll want to keep them above ground.
Will Renters Insurance Cover Relocation?
Water damage can leave your apartment temporarily unusable. Flood insurance won’t cover the cost of short-term housing or eating out while you’re displaced. You’ll have to pay for that yourself.
Do You Need Flood Insurance as a Renter?
To determine if you need flood insurance, you should first analyze your flood risk. The easiest way is to search for your address on the FEMA Flood Map Service Center. The provided map lists the flood risk for your home. If your rental is in a zone that starts with A or V, you’re in a flood hazard zone, and you should consider purchasing flood insurance.
By definition, a high-risk property is close to a body of water, on a lot with a low elevation.
Further, certain geographic circumstances, like living in the hurricane belt, increase your risks.
Even if you’re in a low-risk location, flood insurance may be a good idea. Because a quarter of all claims come from areas outside of high-risk flood zones, you should consider flood insurance if you live in an area with extreme weather, like snow or rain.
How Much Does Renters Flood Insurance Cost?
Insurers determine the cost of flood insurance based on the following factors:
- The risk of flooding in your area.
- The value and variety of the possessions you need to be covered.
- Your deductible, or the amount you pay before the insurance coverage begins.
- Risk Rating 2.0, FEMA’s novel approach to setting rates. It considers risk variables, such as flood frequency and types, building elevation, proximity to water, rainfall, and rebuilding cost.
Renters flood insurance plans through NFIP begin at $99 per year for $100,000 in coverage.
How To Buy Flood Insurance for a Rental Property
Before shopping for renters flood insurance, take a home inventory of your belongings. This practice will help you decide how much coverage you need and provide an accurate record if you need to file a claim.
Next, you should determine where to buy flood insurance from. There are two types of flood insurance. Policies from the National Flood Insurance Program and private flood insurance. NFIP caps benefits for rental flood insurance at $100,000. You should buy additional private flood insurance if your personal property is worth more.
You can purchase an NFIP plan through an agent or insurance company. The government sets the rates, so every insurer’s cost is the same. It’s still important to read reviews and check each company’s customer service record so you can see how they handle claims.