Yes, landlord insurance does cover water damage, with some caveats. According to the Insurance Information Institute, water damage is one of the most common –and most expensive– claims that costs billions for homeowners and landlords every year. The best way you can protect yourself from this type of damage is to make sure you have the proper insurance coverage for your rental property. That way, when a winter freeze strikes and damages your property, you can make an insurance claim to recoup your losses.
Determining what is, and isn't, a covered loss can be challenging for many property owners. Landlord insurance provides great coverage for a range of items such as accidental damage from a fire, to vandalism of the property. In the case of burst pipes on your rental property, you want to make sure that you won't need to pay for the replacement cost of the property out of pocket. The good news is that water damage will generally covered by your landlord insurance policy, however there are exceptions to what is covered.
As a general rule of thumb, water damage is covered under your landlord insurance policy as long as the damage is sudden and accidental. Damage from a burst pipe during a freeze? You will most likely be covered and should make a claim. Did a particularly bad storm damage your roof? Also covered!
In the event of a covered water damage event, the amount of coverage you will receive will depend on your insurance policy. The items that will be covered under this type of event will usually include the property damage, any of your personal belongings that is used to maintain the rental that was damaged, and the loss of rental income for the period that your building could not be used. Landlord insurance coverage does not include your tenant's personal property, so we recommend making sure your tenant has a renters insurance policy of their own. Your tenants having their own renters insurance also has the added benefit of lowering your own personal liability and can lead to lower insurance premiums in the long run.
Much like homeowners insurance policies, most landlord insurance policies will not include flood damage or other natural disasters such as earthquake damage, as a covered loss. In order to make sure you're protected against the loss of rental income, and damages to your rental property, in the case of a flood, you'll need to purchase separate flood insurance. Most insurance companies will be able to help you determine the amount of insurance coverage you may need for your property in the event of a flood.
Your landlord insurance will not cover water damage that occurred over a longer period of time due to negligence, such as water damage caused by a leaky washing machine. If the washing machine is owned by your tenant, you may be able to be reimbursed for any of the replacement costs through their renters insurance, or use their security deposit. Basically, if the water damage occurred because of natural wear and tear over time, it will not be eligible for an insurance claim.
For informational purposes, let's say your tenant slips and injures themselves due to ice on your rental property's staircase, Afterwards, they sue you for the medical fees and other damages. Your landlord liability insurance may cover the legal fees that are incurred from this event, as well as any medical fees due to their bodily injury also may be covered, depending on your policy. The liability coverage in your landlord insurance policy is there to make sure that you are covered for events that involve these legal and medical fees.
Bottom line: Make sure that the property coverage you have protects against the various types of damages that are common for property owners. If you have any questions about what may or may not be covered under a standard landlord insurance policy, feel free to talk to one of our insurance agents at +1 (888) 966-1611.