Flood Insurance for Renters

Can renters get flood insurance?

You can add flood insurance to your renters insurance policy through a Federal Emergency Management Agency (FEMA) program or a private flood insurance company.

FEMA's National Flood Insurance Program (NFIP) provides a maximum of $100,000 in content coverage. The coverage levels of private flood insurance policies vary.

Let’s explore the ins and outs of flood insurance for renters and what to consider if your rental is in a flood zone.

1. Does renters insurance cover floods?
2. Federal flood policy vs. private flood insurance
3. How to determine if you need flood coverage
4. What isn’t covered by flood insurance?

Does renters insurance cover flood damage?

A typical insurance policy does not cover damages caused by flooding. Because flood damage is often catastrophic and the corresponding claims are very expensive, insurance companies may not be able to offer flood insurance. The best way to get renters insurance coverage for flooding is through the National Flood Insurance Program (NFIP) or from a private company specializing in flood insurance. 

The NFIP is backed by the federal government and has enough capital to cover renters and homeowners claims after a flood. Unlike a standard renters insurance policy, flood insurance covers contents only, with coverage limits of $100,000. NFIP coverage includes no liability coverage or coverage for additional living expenses. 

Contents are insured on an actual cash value basis. Unlike replacement coverage, this compensation takes into account depreciation.

Additional living expenses insurance coverage after a flood

Additional living expenses coverage provides compensation if you need to vacate your home after a covered loss. If your apartment were deemed unlivable after a fire, your renters insurance company would compensate you for a hotel stay while your dwelling is repaired. Because fire is a covered loss on most renters insurance policies, your coverage applies.

However, flood damage is considered an uncovered loss. You would not have living expenses coverage in the event of a flood. 

Should you buy a National Flood Insurance Policy or a private policy?

It depends on whether $100,000 of personal property coverage is enough to cover your belongings. The benefit of NFIP policies is their backing by the federal government and the assurance you'll receive compensation, even in the event of a catastrophic disaster. In theory, a private flood company could collapse if the value of damage exceeds its ability to fulfill claims. 

This happened to State Farm in 1992, after Hurricane Andrew wreaked havoc on the US Gulf Coast. Private companies may offer additional coverage options and cheaper rates, but if they file bankruptcy after a flood, it won’t matter.

Popular private flood insurance companies

Research popular private flood insurance companies, get quotes, and compare the prices. Below are some companies that offer private flood insurance.

• Neptune
• Assurant
• AIG
• Swiss Re
• Chubb
• Liberty Mutual Fire
• United Surety
• ASI

Do renters need flood insurance policies?

Flood insurance isn’t required for renters. But if you live in a flood plain, you should seriously consider it. To determine whether your rental is located in a flood plain, search for your address in FEMA's flood zone lookup. If you’re in a low-risk area, you can buy a Preferred Risk Policy. These policies offer the lowest premiums.

If you’re a homeowner, your mortgage company may tell you whether flood coverage is necessary.

What isn’t covered by renters flood insurance?

A renters flood insurance policy offers no liability coverage or loss of use (additional living expenses). Furthermore, a national flood policy backed by FEMA caps personal property coverage at $100,000. In the event of a total loss, that is the maximum amount you would receive to cover damages to your belongings. 

Sewer or water backup coverage

Flood insurance is designed to cover water damage from a natural disaster — flash flooding, hurricanes, etc. If a pipe bursts in your kitchen and floods your apartment, flood insurance would not apply. You can add coverage for burst pipes and other mishaps to a standard flood insurance policy as an endorsement.