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Renters insurance coverage is based on specific perils, or types of damage, rather than the type of storm. During a hurricane, non-flood water damage and damage caused by wind, hail, fire and lightning will almost always be covered by a renters insurance policy. Floods, however, are typically not covered by renters insurance, and tenants seeking financial protections against flood damage should purchase a contents-only flood insurance policy.
How Renters Insurance Covers Hurricane Damage
Whether or not renters insurance covers you depends on the cause of damage. In insurance terms, the cause of the damage is known as a peril. Hurricanes themselves are not defined as perils, but the damage-causing elements of a hurricane—floods and hail, as examples—are perils. Many of the perils associated with a hurricane will be covered under renters insurance with the notable exception of floods.
Common hurricane perils that are...
|Covered by renters insurance||Not covered by renters insurance|
|Fire and lightning||Flooding|
|Wind and hail|
|Non-flood water damage|
Renters insurance provides financial protection through four coverages: personal property coverage, additional living expenses (ALE) coverage, personal liability coverage and medical payments coverage. Only the first two—personal property and ALE—apply during a hurricane.
Renters insurance coverages include…
- Personal property: If your personal property is damaged in a hurricane by a covered peril—such as wind—your insurer will cover the cost of the damage up to your policy's limits.
- ALE: Also called loss of use coverage. If your rental home or apartment is rendered uninhabitable by a covered peril during a hurricane, renters insurance will cover the costs of staying somewhere else. This coverage only applies to expenses above and beyond your normal expenses.
- Personal liability: Covers costs associated with you being found legally liable for bodily injury or property damage to another person. This could be used to cover an event that happens during a hurricane, but it is not directly related to hurricane damages.
- Medical payments: Covers limited medical costs if a guest is injured on your property. Coverage is not directly related to hurricane perils.
Renters Insurance Personal Property Coverage for Hurricanes
If a hurricane damages your personal belongings, and the damage is a result of a covered peril such as wind or lightning, your renters insurance policy will cover the costs of replacing or repairing those items up to your policy limits. If the damage is due to an uncovered peril, the most notable of which is flooding, renters insurance will not cover you. To protect against flood damage as a tenant, you'll have to buy a separate flood insurance contents policy.
Wind and hail damage are examples of hurricane phenomena that are included in personal property coverage. Imagine that severe wind and hail breaks the window of your apartment and damages your television and couch. Renters insurance will help you replace those items, with the amount your insurer pays depending on whether you have a replacement cost or actual cash value policy. Tenants should note that they are not responsible for the window damage, as it is part of the structure of the apartment and should be covered by a landlord insurance policy.
Similarly to homeowners insurance, renters insurance does not cover hurricane flood damage. Floods may be defined as storm surge or spray from a body of water, water that has backed up through sewers or drains or water below the surface of the ground. However, what exactly constitutes flood damage can be nuanced, and you should make sure you understand exactly what types of water damage are excluded before you purchase a renters insurance policy. Typically, covered water damage includes internal leaks or rain damage resulting from the structure of your rental apartment being damaged.
Renters Insurance Additional Living Expenses (ALE) Coverage for Hurricanes
ALE operates under the same principles as personal property protection: You will only be eligible for coverage if the costs come as a result of a covered peril.
If hurricane winds and hail—covered perils—damage the roof or wall of your apartment and it becomes uninhabitable, you'll be covered for living expenses necessary to maintain your normal standard of living (up to the policy limits). For example, the cost of staying in a hotel will be covered until your apartment is repaired and livable again.
However, if flooding—an uncovered peril—renders your apartment uninhabitable, ALE coverage does not apply. This means that if severe hurricane floods have left your home unlivable, your renters insurance provider is off the hook, and you'll have to cover the additional living expenses, such as the cost of hotel rooms, yourself.
ALE Coverage for Mandatory Evacuations
Insurers are not always clear if ALE will cover your expenses in the event of a government-mandated evacuation. Renters insurance policies will often include language stating that ALE coverage applies if a civil authority prohibits you from living in your residence premises as a result of damage by covered perils to neighboring premises. This suggests that ALE can only be utilized after damage occurs but not before the damage, as may be the case in the event of a preemptive evacuation.
Although ALE may not apply to an evacuation, we recommend that renters who need money for an evacuation attempt to make a claim for the coverage in the event of a hurricane. Insurers may accept your claim, depending on the language included in your policy. If insurers reject your claim, you may also be able to apply for federal disaster assistance from the Federal Emergency Management Agency (FEMA). FEMA can provide grants or loans to renters who cannot pay for disaster-related expenses—such as moving and storage expenses—by other means.
Renters Can Protect Themselves Against Hurricane Flood Damage with Flood Insurance
Although renters insurance won't protect your property from a hurricane-induced flood, you can protect it with contents-only flood insurance. However, these policies will only cover personal property damage and not ALE.
Most homeowners and renters get flood insurance from the National Flood Insurance Program (NFIP), which writes policies servicing the vast majority of the flood insurance market. Prospective buyers can get up to $100,000 in contents-only coverage with an NFIP policy. And those renters who live in lower-risk flood zones can get $8,000 in contents coverage for as little as $20 per year with a Preferred Risk Policy.
Unfortunately, renters probably won't be able to take advantage of the increasing availability of private flood insurance, as companies in this small but growing private flood insurance market generally don't offer contents-only coverage.
One major downside to NFIP flood insurance is that it does not cover ALE, meaning it cannot be used to cover the expenses of living outside your rental home or apartment if it becomes uninhabitable. If you rent in a high-risk flood zone, you should be prepared for the possibility that severe flooding damage could force you out of your home and that you'll have to pay the costs of staying elsewhere yourself. Again, applying for disaster assistance from FEMA is a way to help mitigate these costs, but there is no guarantee you'll receive these funds.