Renters Insurance Catastrophes

(Find out what is and isn't covered by your renters insurance)

Tomas Fire Santa Barbara, California

According to a Swiss Reinsurance Company study conducted in 2015, many of the nation's most costly catastrophes have occurred in the past 15 years. Many scientists believe the worst is yet to come due to global climate change.

The following catastrophes have cost U.S. insurance companies millions to billions of dollars as policyholders have filed claims to recover their losses:

  • Hurricane Katrina (2005): $79.66 billion
  • Hurricane Sandy (2012): $36.12 billion
  • Major outbreak of 349 tornadoes (2011): $7.69 billion
  • Wildfires (2003): $3.5 billion (2007): $2.5 billion (2008): $2 billion
  • Washington earthquake (2001): $400 million
  • California earthquake (2011): $110 million

Harder numbers to crunch are the untold billions in uninsured losses. Unfortunately, many renters believe their property is covered under their landlord's insurance policy and are left with little or no recourse to recover when catastrophe strikes. 

The landlord's policy will cover the building or home you rent, but not your personal property stored inside.

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Take a closer look at what catastrophes will or won't be covered under your renters insurance policy with these top 6 most common catastrophe-related policy questions:

1. Does renters insurance cover fire damage?

2. Does renters insurance cover earthquakes?

3. Does renters insurance cover tornado damage?

4. Does renters insurance cover hurricane damage?

5. Does renters insurance cover flood damage?

6. Does renters insurance cover bed bugs?

7. Where can I buy renters insurance?

Does Renters Insurance Cover Fire Damage?

Although huge wildfires like those in California, Washington and other western states cause billions in damage and make national news headlines, more people are affected by smaller, single-structure fires, often caused by humans. 

In fact, according to the National Fire Safety Council, people experience a home fire on average once every five years. Now, that statistic may seem frightening, but most home fires are not catastrophic. 

According to the NFSC, the majority of home fires start in the kitchen. Since that is where many expensive appliances and electronics are stored, even a contained, one-room fire can have significant costs.

Renters insurance includes fire coverage. It will help reimburse you for damage caused by flames and smoke. The amount of compensation you will receive in the event of fire damage depends upon several factors, including:

  • The amount of coverage you buy
  • Whether you choose actual cash value (depreciated) coverage or replacement cost coverage for your belongings
  • Your deductible  

If your rental unit experiences a fire, you will file an insurance claim for the loss. If your deductible is $500, you pay that and the remaining losses will be covered by the insurance company up to the limit you set in the policy. 

Say the fire causes a total of $15,000 in damage and your policy limit is $25,000. You will pay the first $500 and the remaining losses will be reimbursed to you by the insurance company.

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Does Renters Insurance Cover Earthquakes?

A traditional renters insurance policy excludes damage caused by earthquakes. Earthquake renters insurance is separate coverage in high-risk areas along fault lines, generally in California, Alaska and Hawaii. 

You may be able to add renters earthquake coverage as a rider to your policy if you live in an affected area, or you may have to purchase a separate catastrophic insurance policy.

A renters earthquake policy will help:

  • Repair and replace personal property, such as TVs and furniture.
  • Pay for loss of use and additional living expenses, such as temporary housing while your rental is repaired.
  • Cover emergency repairs, such as removing broken glass from furniture and clothing.

Even with renters earthquake insurance, some property may not be covered, including:

  • Pets, bird, fish, livestock, and other animals
  • Artwork, photographs and ceramics
  • Motor vehicles (and any property stored inside) and trailers
  • Glassware, crystal, porcelain, and china

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Does Renters Insurance Cover Tornado Damage?

Many renters insurance policies include coverage for wind damage, so tornado policies don't have to be bought separately, as is true for other types of catastrophes.

Unfortunately, most renters will suffer after a tornado, as only 43% have renters insurance, according to the Insurance Research Council.

In states where a natural disaster has been declared by the president, the uninsured or under-insured could receive federal aid, but that is capped at just over $30,000, and a typical payment is likely to be much less.

Last year, tornadoes and severe thunderstorms were the No. 1 cause of insured losses from natural catastrophes in the U.S. But during much of the past decade, insured losses from tornadoes have ranked second behind losses from hurricanes and tropical storms, according to research by the Insurance Services Office.

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Does Renters Insurance Cover Hurricane Damage?

Damage caused by hurricanes is less cut and dried than with other types of catastrophes. While most renters insurance policies do cover wind damage, some companies in coastal areas affected by hurricanes exclude this from standard coverage. 

One policy may cover wind damage caused by hurricanes, and another may require you to purchase an additional rider or hurricane renters insurance.

Hurricanes can also cause water damage. If the water is falling from the sky during the hurricane and causes damage, your renters insurance will most likely cover it. If the water damage is caused by flooding due to the hurricane, it will most likely be excluded from standard renters insurance.

It is important to carefully read and understand any renters insurance policy before purchasing it so you know exactly what is -- and more importantly, what isn't -- covered.

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Does Renters Insurance Cover Flood Damage?

Even if a hurricane was not the cause of a flood, a basic renters insurance policy will not cover this type of catastrophe. In fact, no standard insurance policy will cover flood damage.

Flood insurance is regulated and sold by the National Flood Insurance Program (NFIP), created by the government to help property owners recover following a flood. You may be required to purchase renters flood insurance if you live in an area zoned for high risk of flooding.

Flood insurance isn't federally required in moderate- to low-risk areas, but it's still a good idea. In fact, people in these areas file more than 20% of all NFIP flood insurance claims. Most condo owners and renters in moderate- to low-risk areas can obtain coverage at a reduced rate.

Premiums for flood insurance for renters are calculated based on factors such as:

  • Year of building construction
  • Building occupancy
  • Number of floors
  • Location of contents
  • Flood risk (e.g., flood zone)
  • Location of the lowest floor in relation to the base flood elevation on the flood map
  • Deductible and amount of coverage

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Does Renters Insurance Cover Bed Bugs?

If you've ever dealt with a bed bug infestation, you know recovery is time-consuming. Unfortunately renters insurance policies typically exclude bug infestations of any kind, including bed bugs, cockroaches and other bugs as well as rodent infestations. 

You most likely are also not covered for any damage these pests cause, or for the costs to eliminate an infestation problem.

However, as a renter, keep in mind that some states have specific laws about landlord and tenant responsibilities when it comes to bed bugs. 

Generally, it's wise to tell your landlord about the infestation right away. Because they own the property, they're probably responsible for having a qualified exterminator inspect both your unit and the surrounding units, as well.

While the costs to replace anything infested or damaged by pests is yours, the inspection should be the landlord's responsibility.

In keeping with their responsibility to provide habitable housing, landlords must pay to exterminate pests, such as bed bugs, that a tenant has not introduced. In some states, such as Florida, this duty is explicit. 

But determining who introduced the bed bugs is often very difficult in multi-unit buildings. If you rent a single-family home, especially if you are a long-term tenant, you may be more easily saddled with the costs, as it will be difficult to claim another person is responsible for introducing the bed bugs.

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Ready to Save on Renters Insurance?

Our independent agents shop around to find you the best coverage.

Where Can I Buy Renters Insurance?

When catastrophe strikes, it's important to have an insurance agent who is on your side. Knowledgeable, independent agents are always available to answer any questions you may have concerning renters insurance. 

These agents can assist you in finding a variety of quotes from a number of different insurance companies, ensuring the renters policy you buy offers the best coverage at the most affordable rates.

Our agents work for you, not the insurance company. They will explain which catastrophes a policy covers and what is not covered. They can help you decide if you need any additional riders or policies to cover things like earthquakes, depending on where you live. Contact a local agency near you today.  

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