While a renters insurance policy covers many types of damage, water damage due to floods is not one of them. If you live in a part of the country prone to floods, this puts you at risk. The National Flood Insurance Program (NFIP) offer flood insurance coverage for renters and homeowners, and is available through private insurance companies.

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Is flood insurance needed if I rent?

Damage due to flooding is not covered under any standard renters insurance policy. If it was, it would make renters insurance premiums unaffordable. You can find out your risk of flood on the FEMA flood map.

Even if you don't live in an area with a high flood risk, keep in mind that there's no such thing as a zero-risk flood area. The NFIP estimates that about 20% of flood claims come from low- to moderate-risk flood areas. There is often government disaster assistance after a flood that renters can fall back on if needed. However, most federal recovery funding comes in the form of a loan that requires repayment with interest. If you rent somewhere that has any sort of risk of flood, we highly recommend investing in flood insurance coverage.

What water damage is covered with flood insurance?

The NFIP states that a contents coverage flood insurance policy covers the following in the event of water damage due to flooding:

  • Clothing
  • Electronics
  • Furniture
  • Washers and dryers
  • Curtains
  • Portable dishwashers and microwave ovens
  • Valuables such as jewelry and artwork (up to $2,500)
  • Freezer units and food stored in them

Flood insurance has two types, dwelling coverage and content coverage. As a renter, you do not need to worry about getting dwelling coverage. The property owner you rent from deals with that.

What flood insurance doesn't cover

While flood insurance covers a great deal, it doesn't cover everything. The NFIP defines flooding as "rising waters." This means that damage due to rain water coming into your rental home due to high winds isn't covered. If mildew or mold occurs that was preventable, it is excluded as well.

Flood insurance also does not cover additional living expenses (ALE) if you need to relocate while your rental home is being repaired. Also know that standard renters insurance doesn't cover ALE in the event of a flood either.

Furthermore, currency, precious metals and valued documents such as stock certificates are excluded from flood insurance coverage.

How to buy renters flood insurance

The NFIP regulates flood insurance, but it is sold through private insurance companies.

You can buy two types of flood insurance policies: a preferred risk policy or a standard rated policy.

Preferred risk policy

This policy type gives both dwelling and contents coverage at a preferred rate, and covers up to $100,000 in contents. As a renter, you would only need to get a contents coverage policy.

Standard rated policy

This policy type is available for both dwelling and contents coverage, but is not available to renters living in a low- to moderate-risk flood zone. If you live in a high-risk flood zone, this is your only option.

The average cost of flood insurance is $771 a year. Since the NFIP is the sole regulator of flood insurance policies, rates don't vary from company to company. Instead, your flood insurance premium is based on:

  • The location of your rental home
  • Elevation (which floor your apartment is on)
  • Risk by flood zone
  • Age of the home
  • How much coverage you buy

It's also important to know there is a 30-day wait period from when you buy the policy to when it goes into effect. You can't get flood insurance the day before a flood is supposed to hit and get coverage.

Flood insurance differs from home or auto insurance in that there are no policy discount options available. However, there are some ways you can save on your flood insurance costs. If you don't live in a high-risk zone, you should definitely go for the cheaper preferred risk policy.

Another way is to see if your community takes part in the Community Rating System (CRS) program. This is an NFIP-backed program that offers a lower flood insurance rate to communities that work to reduce their overall flood risk. This discount can be anywhere from 5% to 45%. You can learn more about the CRS program at the FEMA website.

How to submit a flood insurance claim

After a flood has occured, contact your flood insurance company as soon as possible. You will need to provide your policy number, insurance company name and your contact information.

Separate the flood-damaged items as much as possible and take pictures of them. If you have receipts for the damaged items, collect those as well. This is also a good reason to have an inventory list created ahead of time. An inventory list will make compiling the damaged items for your insurance company much easier, and may even speed up your claim process.

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