Flood insurance for renters: A complete guide

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While renters insurance will protect your personal possessions from some water damage, such as broken pipes or an overflowing toilet, it will not cover you for a flood. In order to fully protect your personal possessions, you will need a separate flood insurance policy.

Flood insurance is never a required coverage for renters because it only protects your personal possessions. The apartment or rental home structure itself would be protected by the landlord’s flood policy. However, if you don’t have flood insurance, the cost to replace all of your possessions will fall on you.

Renters can buy flood insurance from both the National Flood Insurance Program (NFIP) and from private insurers. Keep reading our flood insurance for renters guide to learn everything you need to know about flood insurance.

Can renters get flood insurance?

Renters can purchase a flood insurance policy from either the National Flood Insurance Program (NFIP) or from a private insurer. Just like homeowners insurance, a standard renters insurance policy excludes damage done by flooding, so unless renters buy a flood insurance policy they are not covered for flood damage.

A renters flood insurance policy covers the contents of your rental — the rental owner buys coverage for the structure of the rental unit. A typical flood insurance policy for renters covers items such as:

• Clothing
• Electronics such as computers, stereos and tablets
• Furniture
• Valuables such as artwork, jewelry, wine collections and other high-end goods
• Books
• Kitchen items
• Mini fridges
• Portable microwaves and dishwashers
• Window air conditioners
• Portable clothes washers and dryers

If your belongings are damaged by a flood, you can make a claim for your personal possessions up to your coverage limits. NFIP policies cap personal property coverage at $100,000 but private insurer policies typically offer higher coverage limits.

Most flood insurance policies do not include additional living expenses, which cover your day-to-day living expenses, such as a hotel. If you cannot live in your rental unit because of flood damage, you will have to pay for day-to-day living expenses. 

Does renters insurance cover flood damage?

A standard renters insurance policy excludes flood damage, which means it won’t replace your possessions that are damaged by flooding. If you live in an area where flooding is common, or even possible, you should buy flood insurance to fully protect your personal possessions. Renters insurance also excludes earthquake damage and you will need a separate earthquake policy to cover damage caused by earthquakes.

What isn’t covered by renters flood insurance?

While exclusions vary by private insurers, the following are excluded from coverage with an NFIP policy:

• Damage caused by moisture, mildew, or mold that could have been avoided by the property owner or which is not caused by a flood
• Damage caused by earth movement, even if the earth movement is caused by a flood
• Additional living expenses, such as temporary housing, while the building is being repaired or is unable to be occupied
• Loss of use or access to the insured property
• Financial losses caused by business interruption
• Property and belongings outside of an insured building, such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools
• Currency, precious metals, and valuable papers, such as stock certificates
• Most self-propelled vehicles, such as cars, including their parts

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How to buy flood insurance for a rental property

Purchasing flood insurance as a renter is fairly easy. An NFIP flood insurance can be purchased from an NFIP authorized agent or you can shop for flood insurance in the private market. While NFIP policies are backed by FEMA, they are sold via standard agents. You can find agents that sell NFIP policies here. 

NFIP policies come with coverage caps of $100,000 for your personal possessions. It is possible to purchase a policy with lower coverage levels, but if you need coverage levels above $100,000 you will have to shop in the private market.

If you are looking for flood insurance from the private market, simply call local insurance companies to get a quote on a renters flood insurance policy. When you find one that meets your coverage requirements and is affordable, you will need to sign the policy paperwork and pay the premium for the policy to become active.

Most flood insurance policies (and all NFIP policies) come with a 30-day waiting period before coverage becomes active. This is to prevent people from purchasing coverage only when a storm is bearing down on them.

If your building is in a low-to-moderate risk area, you may be eligible for a Preferred Risk Policy according to FEMA. A Preferred Risk Policy comes with the lowest premiums available through NFIP. While you may not think you need coverage in a low to moderate risk area, roughly 26% of all NFIP flood claims occur in the low-to-moderate risk areas.

How much does renters flood insurance cost?

Overall, the average annual flood insurance premium with NFIP is $958 nationally for homeowners, because an NFIP flood policy for a homeowner includes coverage for personal possessions and the home. But renters will pay much less for coverage because renters are only insuring their personal possessions. 

Your own premium will vary depending on your apartment’s risk factors and will most likely fall well below the national average. However, if your building is in a high-risk area, the premium could be higher than the national average.

Where to buy flood insurance

In most cases, flood insurance is available from the NFIP or a private insurance company. The NFIP is currently the largest writer of flood insurance policies in the country and these policies are backed by FEMA but are sold via private insurers.

While private insurance policies currently make up a small percentage of the market, their slice of the pie is growing. Here are the major differences between an NFIP policy and a private market one:

• Maximum contents limit: NFIP policies have a coverage cap of $100,000 which may not be enough for all of your personal property. Private insurers offer higher coverage limits.
• Coverage availability: NFIP policies are available in all 50 states while private market policies can be hard to find in high-risk areas. In many high-risk areas, NFIP coverage may be the only option.
• Waiting period: While an NFIP policy comes with a 30-day waiting period before coverage kicks in, a private party policy typically has a waiting period of two weeks or less.
• Replacement cost for possessions: An NFIP policy will value your personal possessions using actual cash value which accounts for depreciation. A private market policy may cover personal possessions at replacement value so you will get a new one of similar quality regardless of how old it was when destroyed.
• Loss of use coverage: Loss of use coverage will help pay for some everyday expenses if your home is too damaged to live in after a flood. It will pay for hotels, restaurants, and even dry-cleaning bills. NFIP policies do not offer this coverage while private market policies typically do.
• Loss avoidance coverage: This coverage will typically pay to help prevent damage to your home before the flood hits, sandbags are an excellent example. NFIP policies will not pay for this coverage, but private market ones often include it.

How renters flood insurance rates are calculated

According to FEMA, renters flood insurance rates are calculated based on the following factors:

• Building age
• Building occupancy
• Number of floors
• Location of contents
• Building claims history
• Your deductible
• Your amount of coverage

Mark Vallet

Contributing Researcher

 

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Mark is a freelance journalist and analyst with over 15 years of experience covering the insurance industry.

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