Does Renter’s Insurance Cover Any Type of Water Damage?
Many people assume all water damage is covered by their renter’s policy and thus opt out of purchasing any additional coverage. While renters insurance may help when there is a water leak that damages your personal property, in the majority of flood damage cases you will end up paying to replace or fix your belongings out of pocket.
Since renters insurance policies do not cover most water damage, renters need to purchase a separate flood insurance policy. Congress created the National Flood Insurance Program (NFIP) in the 1960s to help property owners recover after experiencing losses due to natural water damage. The program helps subsidize the cost of coverage and is the only source of flood protection.
According to the Center for Research on Environmental Decisions, floods are the most common, and therefore the most costly, type of natural disaster in the U.S. Flood insurance helps pay for the cost to repair or replace your belongings in the event of a flood. As a tenant, you will need a contents-only flood insurance policy, since the building, home or condo you rent should be covered by the owner. Most property owners in areas considered high risk for floods are required to carry flood insurance, whereas renters are not. Unfortunately, this means many renters are not adequately insured when disaster strikes.
What Does Flood Insurance Cover?
- Personal belongings, such as clothing, furniture and electronic equipment
- Portable and window air conditioners
- Portable microwave ovens and portable dishwashers
- Carpets that are not included in building coverage
- Washers and dryers
- Freezers and the food in them
- Certain valuable items such as original artwork and furs (up to $2,500)
Do I Need Flood Insurance for My Rental Unit?
Renters in high-risk areas for flooding definitely should purchase a policy to protect themselves from water damage due to heavy rain or rising water. Just because renters live in a low-to moderate-risk zones, however, does not mean they should forgo the protection of such policies. According to the NFIP, roughly a quarter of all flood insurance claims come from outside high-risk zones. Some people mistakenly believe that federal disaster aid will help them recover their losses from a flood. They are shocked to learn that FEMA aid often has to be repaid and, if accepted, they may be required to carry extra insurance in the future. Relying on federal assistance at a time when all your possessions are floating around your apartment isn’t the best plan. You want the fast relief and no-strings-attached protection only a renter's flood insurance policy can offer. Census data indicates that the average renter owns about $20,000 worth of personal property. Can you afford to replace every single thing you own? If not, a flood insurance policy is a wise investment.
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What Can I Do if My Rental Floods?
- Read your flood policy; what coverage options did you choose?
- Photograph all of your damaged property.
- Immediately dry out any water-damaged items. Flood insurance doesn’t cover the costs of cleaning mold or removing moisture if you don’t attempt to dry them as soon as possible.
- Use an air conditioner, furnace or fans to assist in drying out your belongings.
- Try to find documents (receipts) relating to the purchase of flood-damaged property
- Contact the owner so they can begin to dry out carpeting in the rental unit.
- Keep oriental rugs wet – roll them up and have them professionally cleaned.
- Clean floors, walls, and cabinets with mixture of 1 part bleach to 4-parts water.
- Separate the damaged property from the undamaged property.
- Make a written inventory of damaged property for the adjuster.
- If you own any of the appliances, have a technician clean, service and provide a repair estimate for any damages.
How Much Does a Renter's Flood Insurance Policy Cost?
Flood insurance premiums are calculated based on factors such as:
- Year of building construction
- Building occupancy
- Number of floors
- Location of contents
- Flood risk (i.e., flood zone)
- Location of the lowest floor in relation to the elevation requirement on the flood map (in newer buildings only)
- Deductible you choose and amount of flood coverage
A renters flood insurance policy with contents-only protection can be found for as little as $100 or less per year. That’s a great price for the peace of mind it offers.
Where Can I Buy Flood Insurance?
Although the policies are underwritten by the federal government, you will still want a reputable insurance agent to help you decide on the best flood insurance coverage options for you. The agent must also be trusted to assist you in the event you need to file a flood damage claim. When you’re treading water, no one can help keep you afloat like a independent insurance agent. These agents are experienced in working with the NFIP to help renters recover quickly following a disaster. Contact an agent today to find out how you can flood-proof your life.