Renters Insurance and Water Damage

If water damage occurs in the home you’re renting, are you covered? Learn here what renters insurance takes care of.

If water from a ceiling leak or a toilet overflow damages your personal property, renters insurance usually takes care of it. Most renters insurance policies cover you against sudden water damage caused by accidental overflow and water discharge. Damage due to instances such as flooding or sewage water are not typically covered, however add-on coverage for these perils is often available for purchase. This article includes:

Does renters insurance cover water damage?

The standard renters insurance policy covers damage to your personal property caused by accidental water overflow and discharge. This means that if water leaks from the roof or ceiling down into your apartment and ruins your furniture, your renters insurance would cover it. The full range of water damage that renters insurance usually covers also includes:

  • Accidental water or steam discharge.
  • Frozen or burst pipes.
  • Rain and hail.

If accidental water damage occurs in your apartment or home and you're sued by your rental owner for damages, the liability portion of your renters insurance should cover your court costs up to your policy limits regardless of whether you win or lose. Any damages the court requires you to pay are covered up to your limits as well.

If your rental unit is destroyed by water damage and you have to move out, the loss of use (also known as "additional living expenses") portion of your renters insurance policy can help cover additional rent costs while you find a new home. It can also cover other costs due to relocation such as food, laundry and added commuting costs if you relocate farther from work.

Renters insurance is usually a named perils policy by default. This means that the policy only covers perils explicitly listed in writing. The water damage coverage noted above is usually part of a named perils policy, but make sure before you sign on the line. There are also all-perils renters insurance policies that cover everything unless explicitly excluded in writing. These cover water damage and much more than a named perils policy, but are also quite expensive.

Since your personal property is a major part of your renters insurance coverage, it's important to have a strong overview of what you actually own. The best way to achieve this is to create a home inventory list. Include details of any makes, models, serial numbers and costs of the items you own. Not only will this give you an accurate idea of how much personal property coverage you need, but it can speed up your claim filing and payout processes with your renters insurance company.

Landlords will usually require renters to purchase renters insurance as part of a rental agreement. Renters insurance costs an average of $180 a year. When you consider the range of coverage that renters insurance provides, it's excellent protection even if you're not required to have it.

What water damage does renters insurance exclude?

First of all, renters insurance is designed to cover sudden and accidental damage. As such, it will not cover water damage that occurred by your own negligence, on purpose or over long periods of time. For example, if you leave a window open and your carpet and couch are ruined by rainwater, your claim would be denied. The same goes if you leave a faucet running and it soaks your apartment.

Water backup from a sewage line or water seepage from under the building's slab is not covered either. Your renters insurance company may provide a rider for sewage backup coverage that can be added onto your policy.

Renters insurance doesn't cover water damage from flooding. Your landlord isn't responsible for it as well, which can put you in a hard position. If you live in a FEMA-designated flood zone, you should be able to purchase a rider for flood damage coverage through any insurance company that participates in the National Flood Insurance Program (NFIP). Some independent rental insurance providers sell NFIP flood insurance coverage as well.

If you happen to be subletting an apartment you rent and water damage occurs while you are not living in the rental, the damage would not be covered.

All coverage exclusions will be listed in detail in your policy. If all exclusions are not clear, make sure to contact your renters insurance company for clarification.

What water damage is my landlord responsible for?

Should your apartment be damaged by water, keep in mind that your renters insurance only covers your own personal property. All damage to the actual structure, plumbing and electrical systems or appliances of your apartment unit or rental home due to water is up to the landlord.

Also, most rental agreements don't hold renters personally liable for structural issues in the building they live in. Insurance providers assume that any potential leaks will be taken care of by your landlord as part of their routine maintenance. All damage to the structure of your apartment unit or rental home due to water is up to the landlord. 

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