Flooding is one of the most common and expensive natural disasters in the United States. For landlords, even a small amount of water can cause tens of thousands of dollars in property damage, from ruined floors to structural issues. But does landlord insurance cover floods?
In most cases, the answer is no. Standard landlord insurance policies exclude flood damage, including at Steadily. If you want coverage, you will need a separate flood insurance policy. This guide explains what flood insurance covers, how much it costs, and why landlords—especially in Texas and Florida—should consider adding it.
Does Landlord Insurance Cover Flood Damage?
A standard landlord insurance policy does not cover flood damage. While it may pay for certain water-related events, like a burst pipe or rain damage after a windstorm, it excludes damage caused by external flooding.
Flooding is defined as water rising from the ground, often due to overflowing rivers, heavy rainfall, flash floods, or storm surges in coastal areas. If your rental property is impacted by any of these, a separate flood insurance policy is required to receive coverage.
Why Flood Insurance Matters for Landlords
Rental properties are just as vulnerable to flood damage as owner-occupied homes, and in some cases, even more so. Tenants may not always report minor water intrusion quickly, leading to more extensive damage.
Floods can harm foundations, drywall, flooring, electrical systems, and even landscaping. For landlords, this means not only covering repair costs but also facing the possibility of lost rental income if the property becomes uninhabitable.
In high-risk areas like Texas and Florida, where hurricanes and flash floods are more frequent, flood insurance is a critical safeguard for protecting your investment.
What Does Flood Insurance Cover?
Flood insurance typically includes two types of coverage:
Building Property Coverage
This protects the physical structure of your rental property, including walls, floors, HVAC systems, plumbing, electrical wiring, and built-in appliances.
Contents Coverage
If purchased separately, this covers landlord-owned items like appliances or furnishings in the rental unit.
Flood insurance does not cover damage to tenant-owned belongings. Tenants should have renters insurance with flood coverage to protect their possessions.
It also excludes landscaping, fences, pools, and detached garages unless specifically added to the policy.
Flood Insurance vs Landlord Insurance
Flood insurance and landlord insurance serve different purposes. Landlord insurance covers damage from events like fire, theft, and certain types of water damage such as a burst pipe. It does not cover rising water from external flooding. Flood insurance fills that gap, providing protection when water enters from the ground up.
How Much Is Flood Insurance for Landlords?
The cost of flood insurance depends on factors like your property’s location, flood zone designation, and coverage limits.
On average, flood insurance costs around $700 per year nationwide. In high-risk areas such as coastal Texas and Florida, premiums often range from $1,000 to $3,000 annually.
To determine your cost, it’s best to request a flood insurance quote. Be aware that most policies have a 30-day waiting period before coverage begins.
Do Landlords Need Flood Insurance?
Flood insurance is not legally required unless your rental property is in a designated high-risk flood zone and you have a federally backed mortgage. Even so, landlords in moderate-to-low risk areas should consider it. About 25 percent of all flood claims come from properties outside high-risk zones.
If you own rental properties in areas prone to flooding, such as Houston, Galveston, Miami, or Tampa, flood insurance can protect you from unexpected losses.
National Flood Insurance Program (NFIP) vs Private Flood Insurance
The National Flood Insurance Program (NFIP), managed by FEMA, provides coverage for most U.S. properties. It offers up to $250,000 in building coverage and optional contents coverage. However, it does not include loss of rental income or additional living expenses.
Private insurers may provide higher coverage limits and additional features such as reimbursement for lost rental income. Comparing NFIP and private flood policies helps landlords find the best fit for their needs.
What About Tenants? Does Renters Insurance Cover Flood Damage?
Landlord flood insurance only protects the structure and landlord-owned items. It does not cover tenants’ personal belongings. Tenants should purchase renters insurance that includes flood coverage if they live in a flood-prone area.
How to Get Flood Insurance for Rental Property
To get started:
- Check if your property is in a flood zone using FEMA’s Flood Map Service Center.
- Request a flood insurance quote from a licensed agent.
- Compare options from the NFIP and private insurers to find the best flood insurance coverage for your rental property.
Final Thoughts
Flooding is one of the most significant risks to rental properties, and standard landlord insurance does not cover it. A separate flood insurance policy is the only way to protect your investment against rising water.
Whether your rental property is in Texas, Florida, or another flood-prone area, adding this coverage can save you from costly repairs and lost rental income.
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