Does Renters Insurance Cover Floods?

[USAA]

Updated June 2021

Information courtesy of USAA

Quick question: If you’re a renter, do you have renters insurance?

Chances are, you don’t. According to the Insurance Information Institute, only 41% of renters say they have renters insurance. Compared to the 95% of homeowners who carry homeowners insurance, the contrast is staggering.

Granted, most mortgage lenders require homeowners insurance as a condition for financing, while most landlords don’t add similar stipulations to rental agreements. What most renters don’t realize is that this kind of coverage is surprisingly affordable compared to what homeowners pay. Not only that, but it’s common for homeowners policies not to cover damage from specific situations — some less common, like acts of war and even floods.

“Most renters can protect their belongings for the cost of a pizza per month and much more easily than their homeowner peers,” says CERTIFIED FINANCIAL PLANNER™ and USAA advice director Sean Scaturro.

What does most renters insurance cover?

The good news: Renters insurance covers more than you think and for substantially less than you think.

• Personal property (your stuff, like furniture, clothes, appliances, electronics) is among the most valuable things you own as a renter — good thing that’s covered under renters insurance! Basic policies usually reimburse for the value lost due to damage or theft, whereas comprehensive policies cover cost of replacement.

• Theft of items, which as a renter happens more frequently than you think.

• Your stuff, even when it’s not at your house, like if your laptop is stolen from your car while you’re out or on vacation. Renters insurance covers your property — wherever it is.

• Liability and medical bills, up to a certain degree, can be covered if something goes wrong and you bear some responsibility. If someone is hurt on your property, from a fall or a bite from your pet, renters insurance usually includes a stated amount that will cover damages and doctor’s bills.

• Temporary digs, if your rental becomes uninhabitable and you absolutely, positively cannot live there, at least for the time being. Even costs like hotel bills and food can qualify in this situation.

What are some things renters insurance usually won’t cover?

• Some natural disasters like sinkholes, earthquakes, wildfires and — yes — floods may be specifically excluded on most renters insurance policies. Typically, the landlord owning the building will have their own insurance policy to cover major structural damage, which usually happens during natural disasters.

• Top-dollar treasures, like collectibles, rare artwork or anything else that fetches a high price usually need special coverage, tacked on to an existing policy. These additional coverages are called endorsements, or riders, and for something that would be impossible to replace, it’s worth the extra expense.

• Stuff you damaged yourself not due to an accident is, well, your responsibility. If you threw a really wild party that resulted in some of your things breaking or going missing, sorry — that’s on you!

• Undocumentable items pose a problem when it comes to determining their value. Make sure you retain all relevant paperwork and receipts to indicate how much an item is worth, so if you ever have to file a claim, you can back it up with trustworthy info.

“While renters insurance may not cover everything, your insurance company usually has options and ways to fill the gap in protection that you may have,” Scaturro says.

So, does renters insurance cover floods?

Well, it depends. Insurance companies each have a different baseline insurance policy, so you have to check to see what comes “standard.” If you see something missing, like an adequate value for the amount you want protected, or certain kinds of property (like expensive electronics or heirloom jewelry), most insurers will let you add coverage via an “endorsement” at an extra charge. For example, USAA renters insurance includes flood damage coverage as part of the policy. 

When it comes to flooding, residents on higher floors may not have to worry as much as folks on lower floors, but structural damage could still render building uninhabitable until repairs can be made, so make sure you’ve got a renters insurance policy that covers temporary housing costs, as mentioned above.

“We find that those with renters insurance have immediate resources to get back on track after an unfortunate event and are able to move on with their lives quickly,” Scaturro says. “And they have greater peace of mind knowing that should something else occur, they’ll be protected along the way.”

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