Renters’ Guide to Flood Insurance

Renters Flood Insurance

Renters or homeowners insurance usually does not help pay for damage from flooding. For protection from flood damage, you must buy flood insurance separately.

Renters should consider purchasing flood insurance to protect their personal belongings, like electronics, clothing, and furniture, in the event of flood damage. This coverage, often referred to as “content-only flood coverage,” also includes items like washers, dryers, and portable microwave ovens owned by the renter. Be sure to ask your insurance agent for a full list of what is covered.

Renters typically opt for this type of insurance to safeguard their possessions rather than the building itself, which is the responsibility of the property owner or landlord.

Here are some key features of Contents-Only Flood Insurance for renters:

Belongings Coverage: This insurance covers damage to the renter’s personal belongings caused by flooding. This can include furniture, electronics, clothing, appliances, and other personal items.

No Building Coverage: Unlike homeowners who would need coverage for both the structure and contents of their property, renters don’t need coverage for the building itself. This is because the landlord or property owner is responsible for insuring the structure.

Affordability: Since renters don’t need to insure the building, their contents-only flood insurance premiums are generally lower compared to homeowners’ policies. This makes contents-only flood insurance more affordable and accessible for renters.

Flexible Coverage Limits: Renters can choose the coverage limit that best suits the value of their personal belongings. It’s important to assess the value of your possessions accurately to ensure you’re adequately covered in case of a flood.

This means that renters need to keep their insurance broker up to date on the personal property in their rental property to ensure that the contents-only flood insurance includes sufficient coverage. Renters should talk to their insurance broker about how best to itemize or log personal belongings.

Protection Beyond Landlord’s Policy: Even if the property owner has a flood insurance policy for the building, that insurance policy won’t cover a renters’ personal belongings. Renter’s Flood Insurance fills this gap, ensuring that renters are financially protected.

Peace of Mind: Having content-only flood insurance gives renters peace of mind, knowing that their possessions are covered in the event of a flood. They can focus on recovery without worrying about the costs of replacing their damaged belongings.

Learn more about how to apply for insurance here.

Your Landlord’s Role: Flood Insurance for Real Property Damage

As the owner of the property, your landlord may be required to buy flood insurance for damage to the home or building. A building is required to have flood insurance if it is located in a Special Flood Hazard Area (SFHA), often described as a high-risk area for flooding. If it is not located in an SFHA, your landlord can choose to buy flood insurance but does not have to do so.

How Much Do I Have to Pay for Contents-Only Flood Insurance?

Renters generally pay less for contents-only flood insurance than homeowners do. That is because you are not buying coverage for damage to the structure of the home you rent. You are buying coverage only for damage to the things you own inside the home you rent.

How much you will have to pay depends on many factors. These factors include:

• The risk of flooding where you live
• Whether you want the insurance to pay for damage to things below ground level, such as in your basement
• The deductible you choose
• The amount of coverage you buy

How Much Insurance Coverage Should I Buy?

The highest amount of contents-only insurance coverage you can buy is usually $100,000. That means the insurance company will not pay you more than $100,000 to repair or replace your damaged items.

There are two different methods used to determine how much compensation you receive in the event of a flood-related loss:

Actual Cash Value (ACV) Coverage: Actual cash value coverage takes depreciation into account when determining the payout for damaged items or property.

Depreciation is the reduction in value of an item over time due to wear and tear, age, and other factors.

Under ACV coverage, you will be compensated for the current market value of the damaged item, which is its original cost minus depreciation. As a result, the payout under ACV coverage is generally lower than what you would receive with replacement cost coverage.

Replacement Cost Coverage: Replacement cost coverage provides reimbursement for the cost of replacing or repairing damaged items or property with new items of similar kind and quality, without considering depreciation.

With this type of coverage, you’ll get money to buy a new replacement for the damaged item, no matter how old or worn-out it was when it got damaged. This usually means you’ll receive more money compared to actual cash value coverage, where they consider how much the item has gone down in value over time (depreciation).

The choice between these two coverage options can significantly impact the amount you receive in a flood insurance claim, so it’s important to understand the terms of your policy and choose the one that best suits your needs and preferences.

In an ideal situation, you would buy contents coverage that equals the value of the things in your home that are covered by the policy. If that is not possible, it would be best to buy enough content coverage to pay for the value of the most important things you own inside your home.

For example, you find that the most important things you own in your home are valued at a total of $12,000. So, you buy a flood insurance policy with contents coverage of $12,000. That means the insurance company is agreeing to pay you as much as $12,000 to repair and replace things that are damaged by a flood.

You might decide that it costs too much for you to buy flood insurance that covers the full value of the most important things you own. In that case, you will need to make a personal decision about how much coverage you can afford and need.

Note: This section is not a replacement for insurance coverage advice from a professional  You should consult an insurance broker about the best insurance company, policy, and amount of coverage for your circumstances.

How to Buy Content-Only Flood Insurance

Starting the process for buying content-only flood insurance is easy. Here are some simple steps to follow:

Request Quotes: Contact insurance providers for quotes, comparing costs and coverage options from both NFIP and private insurers. Click here for a list of insurance companies that sell National Flood Insurance Program (NFIP) flood insurance policies. You also can contact the NFIP Referral Call Center at 800-427-4661. Ask to be referred to an agent who sells content-only flood insurance.

Let the insurance agent know you are a renter: This means you need content-only flood insurance

Choose Provider: Select a reputable insurance provider that meets your coverage requirements and fits your budget. Your insurance agent will help answer your questions on what coverage is right for you. The agent will tell you how much the insurance will cost or give you an estimate.

NFIP flood insurance rates do not differ from company to company or agent to agent. That means the price you pay for the insurance itself should be the same no matter which agent you buy it from.

Complete Application: Fill out application forms accurately, providing property details and information needed for underwriting.

Review and Pay: Carefully review the policy terms, pay the premium, and maintain the coverage, knowing there’s often a 30-day waiting period before it takes effect.