Solved! Does Renters Insurance Cover Water Damage?
Water damage can be catastrophically expensive, whether you own your home or rent. Whether or not renters insurance covers it depends on the source.
Q: The relief valve on the radiator in our rented home burst while we were away for a week. We came home to bubbled paint on the wall and ceiling, drenched wall-to-wall carpeting, flooded windowsills, and a chair and bookcase that were soaked and destroyed. Everything is damp, too, so we suspect there may be mold growing in some of the fabrics. Will our renters insurance cover the damage?
A: Coming back to a waterlogged home can be devastating; the free-flowing water likely caused significant damage. When your radiator blew, pressurized hot steam and water were pushed out, and because you were away it was allowed to run freely until you got home. Fortunately, you’re in luck—renters insurance should cover this particular event and will reimburse you for your personal property damage. How much does insurance pay for water damage? Your reimbursement will depend on the total amount of the damage, your deductible, and your coverage maximum, along with your policy type of payout. You’re covered because the water damage was sudden and accidental, not the result of a gradual leak or a flood.
When choosing renters insurance, you’ll want to pay close attention to the sources of water damage your insurer covers. In your case, this event is usually covered, but most renters insurance policies have specific exclusions for water damage resulting from other sources, and you may need to seek out additional types of insurance coverage to make sure you’re protected.
Renters insurance typically covers some water damage, but only for some accidental overflow scenarios such as ceiling leaks and toilet overflow.
Like homeowners insurance, renters insurance provides protection against financial disaster after a covered event or peril. Unlike homeowners insurance, which covers all events except for those that are specifically excluded, renters insurance only covers the particular sources of damage that are listed in your policy. This means you’ll need to read the policy closely to see what your renters insurance covers. Most of the time, you’ll see that your policy includes coverage of water damage caused by accidental overflows and system failures. Leaky pipes that lead to water dripping through the ceiling, overflowing toilets, washing machines with failed gaskets, and water heaters that have dumped their contents all over the floor are examples of this kind of accidental damage, and policyholders will usually be reimbursed to the limits of their policies for damage and loss sustained in such an event.
Damage resulting from the following scenarios that is typically covered by renters insurance includes:
- Accidental water overflow, water leaks, or steam discharge
- Burst pipes
- Rain, hail, ice, snow, lightning
However, renters insurance will not cover water damage due to backed-up sewage or from flood damage—these are scenarios that may be covered with additional, separate policies.
What you won’t find listed as a covered peril on a renters insurance policy is flooding. This can be confusing in policy language, because if you’re asking yourself “Does renters insurance cover floods?” and looking at a bathroom flooded as a result of a broken pipe, you may be unclear about what constitutes a flood. The type of flood damage that renters insurance will not cover is flooding from outside the home.
Flood damage, whether from a huge storm, a broken dam down the road, a blocked storm drain, or swollen riverbanks, causes such expensive damage that regular homeowners and renters insurance policies don’t cover it; the costs are simply prohibitive. To afford the payouts on flood claims, insurers would have to raise the premiums for all their clients to a level that would be unsustainable (and unfair to those who don’t live in a flood risk zone). Instead, renters and homeowners alike can purchase separate flood water insurance from the National Flood Insurance Program, which offers specialized insurance for those in high-flood communities. Some of the best flood insurance companies can provide flood insurance directly, but it’s unlikely to be on a standard policy.
For similar reasons, most renters insurance policies do not list sewer backups as a covered peril. Sewer backups and sump pump backups are usually caused by failure to maintain the system well or clear a clog promptly, and the damage caused by these backups is extremely destructive and expensive to repair. Some, but not all, insurance companies offer a separate endorsement to your main policy to provide coverage in the event of these backups as well.
Damage resulting from the following events that is not covered by renters insurance includes:
- Damage caused by negligence
- Sewer overflow or sump pump failure
Additionally, if you sublet your rented home, any damage that occurs as a result of a typically covered event will ultimately not be covered.
Renters insurance will not cover water damage if the event is caused by the policyholder’s negligence.
This is an important caveat. If the insurance company determines that the water damage occurred as a result of carelessness, it can deny your claim. If you turn on the taps to fill the tub, then run to answer the phone and get distracted until the tub has overflowed, your insurance will likely tell you that you’re on your own in terms of paying for the damage. The same answer goes for damage caused by windows left open in a rainstorm.
Renters insurance only covers your damaged property. The landlord is responsible for maintaining the building to prevent accidents.
One of the benefits of renting over owning is that the cost of maintaining and upgrading the building itself is not your responsibility. It is, of course, your responsibility to immediately report problems that require repair or service to your landlord or property manager, and while it’s not your responsibility, it’s in your best interest to keep reminding the landlord (in writing) if the problem is not handled promptly. Maintaining the building is the landlord’s responsibility.
When you sit down to determine how much renters insurance coverage you need, you may be surprised at how much your possessions would cost to replace. That’s the number you’re aiming for when you choose your coverage limit. You do not, however, have to consider the cost of repairing the actual source of the damage, because that’s the landlord’s responsibility.
Renters insurance can cover the cost of temporary housing if needed.
What happens when your apartment is so damaged that you can’t live there during repairs? This can happen more easily than you might expect, especially with water damage. Ruined flooring, apartment ceiling leaks that cause the drywall to collapse, and toilet overflows that create a biohazard can make it necessary for you to live elsewhere while the cleanup and repairs are completed. If you’re lucky, you have friends or family nearby who you can stay with, but if not you may end up paying for a hotel—which also means you’re paying for food or meals out, parking, and additional commuting costs, and you’re generally inconvenienced. If this is the case, you’ll be pleased to know that most renters insurance would include coverage for the cost of your temporary lodging. This coverage appears in your policy as loss of use renters insurance and will include coverage of additional costs you incur should you have to temporarily move out after water damage that is covered by your policy or your landlord’s.