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Renters insurance is a type of homeowners insurance that replaces your belongings if they're damaged from a fire, storm, or theft. Your landlord has insurance that covers the building and structure, but your belongings inside the rental unit are your responsibility.
When it comes to water damage, renters insurance will cover you, but only if the damage is the result of a covered event (insurance peril). Flooding is not a covered event, and it requires an additional insurance policy.
Does renters insurance cover flood damage?
Renters insurance covers water damage if it's from an insurance peril listed in your policy, but flooding is excluded. To protect your belongings from flood damage, you will need to add flood insurance— separate coverage.
Renters insurance covers your personal belongings if damaged by a covered event, known as an insurance peril. Common insurance perils are fire, theft, storms, hail, and lightning. Flooding is not included as a covered insurance peril and requires separate flood insurance.
What is flood insurance?
Flood insurance covers flood-related damage to your personal belongings. Flood insurance is a separate policy that you add alongside your renters insurance.
A flood is defined as surface water entering the inside of your home structure through existing openings that are above ground level. Flood insurance specifically excludes water damage from sump pumps, sewer water, broken pipes, rain from an open window, and rain from windstorms.
Unlike renters insurance policies that typically use "replacement cost" when paying out for covered damage, flood insurance uses "actual cash value" (ACV) to replace damaged property.
Replacement cost is the cost to replace the item with a new or used product. If a leather sofa is damaged by flood, the actual cash value takes into consideration depreciation of the item. Actual cash value is usually lower than the replacement cost value.
How is flood insurance different from renters insurance?
Flood insurance protects your personal belongings from flood damage only. However, Yael Wissner-Levy, vice president of communications at Lemonade Insurance, told Insider that renters insurance covers three things:
- Things that happen to your stuff
- Things that you're responsible for
- Events that force you out of your rental
Wissner-Levy noted that as a renter, you are protected from anything that suddenly causes water damage without any prior known issues, like the accidental overflow of water or steam from plumbing, heating, AC, or sprinkler systems. You're also protected if your apartment sprinklers go off and soak all your belongings, or if your pipes freeze in the winter and burst.
| Coverage | Included with renters insurance? |
| Dwelling/Structure | No - landlord responsible |
| Personal liability | Yes |
| Personal belongings | Yes |
| Loss of Use (additional living expenses) | Yes |
| High-end electronics/special jewelry | Limited, requires add-on* |
| Roommates | No |
| Cyber liability | Yes* |
| Water damage | Yes |
| Flood | No** |
| Wind or hail | Yes |
| Earthquake | No* |
| Pets | Yes* |
*Available as add-on coverage
**Renters flood insurance is separate
If you rent in disaster-prone areas— where flood zones, hurricanes, tornadoes, wildfires, mudslides, hail, or earthquakes are common — you will have increased premiums, because these natural disasters aren't included in basic coverage and require add-on policies, known as riders.
Will renters insurance cover relocation?
"Loss of use" coverage, also known as "additional living expenses" or ALE, is included in most renters insurance policies and provides reimbursement for temporary housing when a peril causes damage making your rental unit inhabitable.
For "loss of use" and "additional living expenses," much depends on your insurance carrier and it varies by provider. Some carriers will reimburse you for temporary housing. Others may have a list of housing alternatives.
If you're considering leaving your rental due to damage, contact your renters insurance provider first and take detailed pictures of the damage. Make sure to lock up and secure the premises as well.
How much does flood insurance cost?
Flood insurance will be in addition to your renters insurance policy. The average cost of renters insurance is around $15 a month, or $180 yearly.
Renters flood insurance is available through approved National Flood Insurance Program (NFIP) providers like the National Flood Services for around $99 a year.