Renters Insurance: Important Protection, with a Risky Coverage Gap

Renters insurance is an important form of financial protection. A landlord’s property insurance covers the structure and the landlord’s belongings, but not a renter’s belongings, use of the building, or liability for injury or damage. 

Renter’s insurance typically covers damage or loss from threats such as fire, smoke, windstorms, lighting, hail, rain and snow damage, theft, and vandalism. Unfortunately, it usually doesn’t cover flood damage—and flooding is the most common and most costly disaster in the United States.

Floods can happen any time, even if you’re far from water. About 98% of counties in the U.S. have experienced a flood, and about 40% of all NFIP claims come from outside high-risk flood areas.

Severe weather is becoming more frequent and more unpredictable, increasing flood risk in much of the country. Towns, cities, and suburbs undergoing development mean more impermeable surfaces, with more increased risk for flash flooding. These increasing risks make flood insurance more important than ever for many renters.

National Flood Insurance Program (NFIP) flood insurance is available to any renter living in a community that participates in NFIP. Rental flood insurance covers contents in rental units above the lowest elevated floor (excluding subgrade basements), including clothing, furniture, electronics, artwork, small appliances, and more. Contents coverage of up to $100,000 is available. Flood insurance premiums are tailored to the policyholder’s specific risk, based on factors including:

• The building’s age
• The building’s occupancy and number of floors
• The building’s flood claims history
• Flood risk (based on factors such as flood frequency, flood type, elevation, and distance to a water source)
• The location of a renter’s property within the building
• The amount of coverage and deductible chosen.

Talk to your insurance agent about your risks and download NFIP’s brochure with all the details on protecting the life you’ve built with flood insurance for renters.