Does Renters Insurance Cover Flood Damage?

Standard renters insurance policies cover some forms of water damage to your personal property, but not flood damage due to weather. For example, water damage to your belongings caused by a burst pipe may be covered, but damage caused by a nearby body of water overflowing won't. For that, you need a separate flood insurance policy.

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When does renters insurance cover flood damage?

As a general rule, renters insurance will not cover damage to your belongings caused by water coming from outside the house, because it's considered flood damage. So if a storm surge floods your neighborhood and ruins your belongings, your insurance company would not pay for the damage. That also applies to sewage overflows.

However, renters insurance often covers non-flood water damage from internal leaks, such as plumbing leaks. Even if water damage is related to weather, you could be covered if the event is not classified as flood damage.

What does flood insurance for renters cover?

You will need to purchase renters flood insurance, also called flood insurance contents coverage, separately from your standard renters insurance policy. As a renter, you only need to buy protection for your belongings, not the structure of the home — that is the landlord's concern. Renters flood insurance can cover all of the following and more from flood damage:

You should buy the same amount of flood coverage for personal property as you have on your renters insurance policy. You can estimate the value of your belongings by making a home inventory. If you need assistance, many insurance companies, such as Allstate, have calculators online that can help you catalog your belongings.

Does renters flood insurance cover possessions in your basement?

Fewer items are covered if kept in the basement of a rental home. The only personal property flood insurance covers in a flooded basement is:

Considering a basement is especially vulnerable to flooding, be sure to store valuables in other parts of the house if you want them to be covered by flood insurance.

Do you need flood insurance as a renter?

Renters living in a moderate- to high-risk area for floods should get flood insurance. Even if you live in a lower-risk area, it's worth considering. Renters on the Florida coast, for example, may need flood insurance more than most tenants. But unless you're living in an elevated apartment or home, don't underestimate your risk.

To find out whether you live in a high-risk flood zone, you can go to the Federal Emergency Management Agency (FEMA) website and look up your address. FEMA divides areas based on their elevation and proximity to water and assigns a level of risk. In the riskiest zones (A and V), you have a 1% chance every year, and a 25% chance over 30 years, of having a flood in your home. Flood damage can also happen in lower-risk areas. Nearly a quarter of all flood claims come from homes in the lower-risk B, C and X zones.

If you are still unsure of whether to get flood insurance, check this list of the 300 counties with the most flood damage per rented household. If you see your county toward the top of the list, consider getting flood insurance. If a place had a major flood once, it can always happen again.

How to buy flood insurance for a rental property

Getting flood insurance is easy. The government-run National Flood Insurance Program (NFIP) is by far the largest flood insurance company in the country. You cannot buy flood insurance directly from the NFIP though. You'll have to purchase an NFIP-backed policy through an insurance agent.

Currently, there are over 50 insurance companies partnered with the NFIP, so it's very likely that the top renters insurance companies will be able to provide a flood policy. One major exception is State Farm, which pulled out of its partnership with the NFIP in 2010.

Your neighborhood also has to be a participating member of the NFIP, but virtually all towns located near bodies of water are. You can check your locality's participation here.

Private flood insurance for renters

An option other than the NFIP is a private flood insurance company. This industry is still small, with private flood insurance companies covering about 3.5% to 4.5% of primary residential flood policies nationwide. However, the private market is growing, and it provides some advantages over government-sponsored insurance.

For one, NFIP funding could be at risk, because Congress only reauthorizes the program for short periods of time. If Congress allows funding to lapse, it could severely affect how much the NFIP could afford to give.

Another benefit of private flood insurance for renters is that it offers higher limits than the NFIP. But the maximum of $100,000 from the NFIP is likely sufficient.

Currently, the best private flood insurance for renters is the Flood Insurance Agency. It is backed by AIG and offers policies in 37 states. If you live in California or Florida, you also may have some regional options, such as Golden Bear Insurance Company and TypTap Insurance.

How much does renters flood insurance cost?

Renters flood insurance can cost anywhere from below $100 in low-risk areas to thousands of dollars per year in high-risk flood zones. It can be expensive. But if you're renting in a place at risk for flood damage, you should research your options and ensure you're appropriately covered.

The following are some examples of NFIP flood insurance quotes available for contents-only coverage. You can get NFIP quotes yourself from major insurers. However, if you live in a home at high risk of flooding, quotes may not be available online and could be substantially more expensive than these examples.

NFIP contents-only coverage

If you plan on buying from a private flood insurance company, you may be able to find quotes online for both low- and high-risk flood zones. These quotes from The Flood Insurance Agency give you a rough idea of what policies may cost.