What You Should Know about Flood Insurance for Renters
You may think that your landlord’s coverage or your renter’s policy will cover your losses in case of flood damage, but guess again! Regardless of whether your rental home is in an obviously flood-prone area, consider the benefits of carrying a renter’s flood-specific insurance policy.
Who needs it?
Whatever kind of regular renter’s insurance policy you have will likely not help in the case of flooding, which is exempt from typical coverage. But a flood insurance policy can make all the difference if the home you live in suffers rising waters due to an act of nature. A few inches are all that is needed to ruin furniture, electronics, clothing, books—all the possessions that you care about.
What it will cost
Flood insurance premiums are based on your risk level. A renter living in a moderate-to-low risk area, for instance, could pay as little as $49 a year for a flood policy. But the greater the risk, the higher the rate. The risk rating is based on factors such as the location of the building, its age, number of floors and occupancy. You can get a risk assessment for your location to see what kinds of premiums you might have to pay.
In high-risk areas, be aware that property owners are required by law to carry insurance if their lenders are federally regulated or insured. That means their tenants are also at a high risk to lose their personal property and should strongly consider getting a personal flood policy. If you suspect that you are in a high-risk area, talk to your landlord about it to see if she is legally obligated to carry flood insurance.
In communities that participate in the National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency (FEMA), high-risk rates are locked in. The program partners with private insurance companies to offer flood insurance to homeowners and renters at the same rate — regardless of which provider they choose — providing a savings to customers. There are community membership requirements, however, such as enforcing ordinances that reduce the risk of flooding. Check to see if your community qualifies.
What it covers
Courtesy of FloodSmart.com, a renter’s flood insurance policy is likely to cover the following:
- 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
- Clothing washers and dryers
- Food freezers and the food in them
- Certain valuable items such as original artwork and furs (up to $2,500)
A renter’s flood insurance policy will likely NOT cover:
- Damage caused by moisture, mildew, or mold that could have been avoided by the property owner
- Currency, precious metals, and valuable papers, such as stock certificates
- 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
- Living expenses such as temporary housing
- Financial losses caused by business interruption or loss of use of insured property
- Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy)
When the rainy season rolls in, it could be a great relief to know that your worldly possessions are covered in foul weather or fair. Do your homework and see if a flood policy makes sense for you!