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Water Damage and Renters Insurance: Types of Damage Covered

Does Renters Insurance Cover Water Damage?

Renters insurance may cover water damage, depending on the cause of the water. Renters insurance can be a lifesaver regarding water damage caused by covered perils such as burst pipes, storms, or leaking appliances. However, it will not cover damages caused by excluded perils like floods, earthquakes, or intentional acts of the tenant. 

Additionally, it’s worth noting that renters insurance only covers personal property, not the structure of the rental property. The landlord typically has insurance for the building.

Water Damage Can Be Costly Business

Water damage can be costly and devastating, wreaking havoc on your belongings. Water damage insurance claims cost on average over $11,000. Common scenarios that can cause water-related harm include burst pipes, leaky appliances, and severe weather events. 

These situations can cause furniture, electronics, clothing, and other personal items to become waterlogged, warped, or even ruined beyond repair. If the damage is severe enough, renters may also face additional expenses associated with temporarily relocating while their rental unit is being repaired. Loss of use coverage included in renters insurance can help with these costs.

How Renters Insurance Covers Water Damage

Renters insurance can protect you from losses due to unexpected events such as theft, fire, or water damage. When you purchase renters insurance, you pay a monthly premium to an insurance company. If you experience a covered loss, such as harm caused by a burst pipe, you can file a claim to repair or replace your personal property. Renter’s insurance typically includes personal property coverage, liability coverage, and loss of use coverage.

  • Personal property coverage: Personal property coverage protects your belongings, including those damaged by water, up to a certain dollar amount you agree to when you purchase your policy.
  • Loss of use coverage: Loss of use coverage is typically calculated based on a percentage of your personal property limit. If you are forced to relocate, loss of use coverage can help pay for additional living expenses, such as hotel stays, meals, and transportation.

Liability coverage is another part of your renters insurance, but is only sometimes relevant to water damage claims. 

Personal Property Coverage for Water Damage

Personal property coverage is crucial to renters insurance and protects your belongings from water damage. Personal property coverage can compensate for repairing or replacing items such as furniture, clothing, and electronics. 

You will have to pay a deductible; usually, the insurance company will just reduce your claim payment by this amount. When you start your policy, you choose this amount, so be sure it is a number you are comfortable with. The maximum amount you can receive for a claim is the limit you chose minus the deductible. 

Loss of Use Coverage for Water Damage

When filing a claim for loss of use, you could be reimbursed for hotel stays, meals, and transportation expenses if a water-related incident makes your home inhabitable.

However, it’s important to note that loss of use coverage may limit the amount of coverage or specific time frames for reimbursement. Additionally, loss of use coverage typically only applies to necessary expenses and may not cover all costs, such as entertainment or leisure activities.

Also, remember that the damage has to be from a covered peril, and any exclusions in the policy will apply.

What About Water Damage to the Property’s Structure?

Damage to the structure of a rental property refers to any damage that affects the building itself, such as warped flooring, damaged walls or ceilings, or a leaking roof. Your renter’s property will not cover these types of damages. 

Instead, the landlord is responsible for insuring the building and any structural damage that may occur. Landlord insurance typically covers damage to the building and liability protection if someone is injured on the property. In the event of water-related harm to the building’s structure, such as a burst pipe causing damage to the walls or ceiling, the landlord would file a claim with their insurance company to cover the cost of repairs.

See It In Action

Let’s say you’re out with friends one night, and a pipe bursts in your apartment, causing significant water damage. The water floods your living room, ruining your couch, TV, and other belongings.

In this scenario, your renter’s insurance policy’s personal property coverage would likely cover replacing your damaged belongings. If the damaged items cost $5,000, and your policy has a $500 deductible, you would be responsible for paying the $500 deductible, and your insurance company would cover the remaining $4,500.

However, the damage from the burst pipe also affects the apartment’s structure, causing you to have to vacate for some time. In this scenario, you would also need to use your renter’s insurance loss of use coverage. Your loss of use coverage would cover the cost of your hotel stay, meals, and transportation. Your total expenses for alternative housing are $2,000. Overall, your renter’s insurance policy would cover $6,500 for personal property and loss of use.

What Types of Water Damage Does Renters Insurance Cover? 

Covered perils refer to the events or risks your renter’s insurance policy covers. Typically, a renter’s insurance policies cover a variety of perils, including burst pipes, appliance malfunctions, storm damage, ice melt, and sewer backup.

  • Burst pipe: If a pipe bursts in your apartment, causing harm to your personal belongings, your renter’s insurance policy would likely cover the cost to replace or repair them. 
  • Appliance malfunction: Similar to a burst pipe, if a malfunctioning appliance, such as a dishwasher or washing machine, causes damage, your policy would likely provide coverage. Sometimes these items can be insured through your landlord, so you should also check with them and their policy. 
  • Storm damage: In the case of storm damage—if a severe storm causes damage to your apartment—your renter’s insurance policy would likely cover the cost to repair or replace your damaged personal property. An example would be if a lightning strike hits a tree and it causes a hole in your roof, allowing water to get in. 
  • Ice melt: In the wintertime, ice dams can form on your roof and cause adverse effects to the inside of your apartment. In this situation, your policy would likely provide coverage.
  • Sewer backup: Sewer backups are another common peril covered by renters insurance. If a sewer backs up into your apartment, your policy would likely cover the cost of cleaning up and repairing the damage.

What Types of Water Damage Does Renters Insurance Exclude?

While renters insurance policies typically cover a wide range of perils, certain risks are typically excluded from coverage.

  • Flood damage: One of the most common excluded perils is flood damage. This refers to damage caused by water entering your apartment from a natural source, such as a river or a heavy rainstorm. If you are worried about a flood because you live in a high-risk zone, you can purchase a standalone flood policy.
  • Negligence: Negligence is another commonly excluded peril. This refers to situations where the damage is caused by your negligence, such as failing to repair a leaky faucet or neglecting to report a water stain on the ceiling. If damage caused by water exposure occurs due to your negligence, your renter’s insurance policy likely will not provide coverage.
  • Gradual damage: Gradual damage is another excluded peril that can impact coverage. This refers to damage that occurs slowly over time, such as a leaky pipe that causes harm to a wall or ceiling. Gradual damage is typically not covered by renters insurance policies, as it is often seen as a maintenance issue that the renter or landlord should have addressed.
  • Spills: Spills are also typically excluded from coverage. If you spill water on your laptop, for example, your renter’s insurance policy would not cover the repair or replacement cost.
  • Intentional damage: Similar to spills, your policy will not provide coverage if you intentionally cause water-related destruction to your apartment. An example would be if you want a new set of clothing and deliberately damage your clothes with water; this would not be covered. 
  • Mold resulting from water damage: Finally, mold resulting from moisture-related damage is often excluded from coverage. While your renter’s insurance policy may cover the cost to repair the damage, it may not cover the cost to remove mold that has developed due to the incident. 

What Happens If You Caused the Water Damage? 

If you caused water-related destruction to the property, your renter’s insurance policy may not cover the damage. In this case, you would be responsible for covering the cost of the repairs out of pocket.

If the damage also affected someone else’s property, such as a neighbor in a condo unit below yours, you could be liable for the damage. Your renter’s insurance policy may provide some liability coverage in this scenario, but it would depend on the specifics of your policy. If you are found to be at fault for the damage, you may be responsible for paying for repairs or replacement for the affected property.

How to File a Renters Insurance Water Damage Claim

Dealing with damage to your apartment or home can be stressful, but knowing what to do can make the process easier. After minimizing the damage as much as possible, filing an insurance claim is essential. Filing a claim can help you receive financial assistance to cover the cost of repairs or replacement. Here are the steps to follow when filing an insurance claim:

  1. Look over your policy to determine coverage. Before filing a claim, review your insurance policy and understand what it covers. As we discussed, some impacts of water-related incidents may not be covered, so carefully review your policy.
  2. Gather receipts and other supporting materials. To support your claim, you should gather receipts, photos, and other documents showing the extent of the damage and the cost of repairs. It’s helpful to have a video of your personal property as well.
  3. Begin the claims process. Once you have gathered all the necessary information, you can begin the claims process. You will need to contact your insurance company and provide them with the details of the damage, including when and how it occurred. Provide them with all of your documentation.
  4. Work with an insurance adjuster. After filing your claim, an insurance adjuster will assess the damage and determine the amount of reimbursement you’re entitled to. Working with the adjuster and providing them with any additional information needed to process your claim quickly and accurately is essential.
  5. Receive reimbursement. Once your claim has been approved, you will receive reimbursement for the cost of repairs or replacement, minus any deductibles or other fees. This reimbursement can help you get your property back to its pre-damage condition.

Should you need to vacate your premises and have damaged belongings, your insurance will reimburse you for covered expenses in addition to the property if your claim is deemed covered by the adjuster.

What Renters Can Do to Prevent Water Damage

While renters insurance can provide coverage against sudden catastrophes, it’s always more cost-effective to prevent losses altogether. You can minimize the risk of water-related destruction in your rental unit and avoid having to file a claim by taking simple precautions. Here are some tips for avoiding water damage:

  • Take precautions when you know a storm or freeze event is coming. When you know that a storm or freeze event is on the way, you can take steps to protect your rental unit from moisture-related harm. For example, ensure your windows and doors are properly sealed and remove debris from your gutters and downspouts.
  • Use appliances correctly. Appliances like washing machines, dishwashers, and refrigerators can cause water-related destruction if misused. Check the user manual for info on use and maintenance, and check hoses and connections regularly for signs of wear or damage.
  • Be careful when filling sinks, tubs, and other large containers of water. Overfilling sinks, tubs, or other containers can cause water to overflow and damage your rental. Monitor the water level and avoid leaving the room while the water is filling.
  • Keep your landlord appraised of potential issues. If you see any water stains or experience a musty smell, let your landlord know immediately. They can investigate the issue and take steps to prevent further damage.

Putting It All Together

When buying renters insurance, it is crucial to understand what is covered and what isn’t. A renter’s insurance policy can protect you from water damage caused by covered perils, such as burst pipes, storms, or leaking appliances. However, perils like floods, earthquakes, and intentional acts of the tenant are excluded. It’s also important to remember that renters insurance only covers personal property, not the structure. If you experience a water event, call your insurance company to report the claim.