Does Renters Insurance Cover Natural Disasters?

Fact checked by Amanda JacksonReviewed by Lea D. UraduFact checked by Amanda JacksonReviewed by Lea D. Uradu

With natural disasters resulting from climate change impacting property owners, it’s important to consider the financial impact of an event or disaster. If you’re a renter, renters insurance can protect your belongings and help you afford alternative accommodations if a covered event occurs. Learn which disasters your renters insurance policy will and will not cover.

Key Takeaways

• Most renters insurance policies cover tornadoes, fires, hail, and rain and snow damage (non-flooding).
• Renters insurance does not cover floods and earth movement, such as earthquakes and sinkholes.
• Consider including loss-of-use coverage in your renters policy if you’re in a disaster-prone area.
• If you are affected by a non-covered disaster or don’t have renters insurance, the Federal Emergency Management Agency (FEMA) may be able to help.

Understanding Renters Insurance

If you’re a tenant or renter, you may need an insurance policy to protect you and your belongings since your landlord’s insurance only protects the landlord. A renters insurance policy typically provides three areas of coverage.

Personal Property

Renters insurance provides financial compensation if your belongings must be replaced due to a covered event, such as a storm, vandalism, or theft.

Additional Living Expenses

If your rental unit is damaged or uninhabitable, your renters insurance can pay the cost to live elsewhere while the unit is being repaired. The coverage can include hotel, rental, food, and travel expenses.

Note

Not all renters insurance policies offer additional living expense coverage as a standard practice.

Personal Liability

Renters insurance can protect you if someone is injured in your rental unit and you are found legally liable. The policy can cover medical expenses and legal fees.

Covered Disasters

Most renters insurance policies cover common disasters like tornadoes, fires including wildfires, damage from rain (but not flooding), hail, and damage from snow. In other words, if the property you’re renting sustains enough damage to harm your belongings or prevent you from living there due to a covered disaster, your renters insurance policy should cover your losses. 

Be aware that loss-of-use coverage isn’t included in every policy, so check yours to see if you would be provided funds for housing if your rental becomes unlivable after a tornado or fire. Replacing your couch won’t mean much if you can’t afford to rent another apartment.

During widespread disasters like hurricanes or wildfires, housing that is undamaged is often much more expensive. If you live in an area frequently affected by wildfires, tornadoes, or hurricanes, strongly consider adding robust loss-of-use coverage to your policy.

$92.9 Billion

The total cost of weather and climate-related disasters in 2023—the ninth worst year on record.

Non-Covered Disasters

Like homeowners insurance, standard renters insurance policies do not include coverage for floods or earth movements, like earthquakes and sinkholes, unless you explicitly seek out those policies. If you live in an area prone to earthquakes, a policy that covers them can be costly. 

If you live in an area prone to flooding, you may qualify for flood insurance subsidized by the National Flood Insurance Program. However, this flood insurance may still be costly to many renters.

How FEMA Can Help

The Federal Emergency Management Agency (FEMA) may be able to help you if you don’t have renters insurance or if the renters insurance doesn’t cover enough and you’re in an area where FEMA has declared a disaster. Once the disaster is declared, federal grants and loans become available to help individuals in the affected areas repair housing and obtain safe, sanitary, and functional places that are fit to live in.

If you live in an area where a disaster has been declared and need help obtaining or paying for housing, you may qualify for housing through FEMA. You also may be given access to a low-interest disaster loan through the Small Business Administration (SBA). Renters can access up to $40,000 to replace personal property, including vehicles. These loans usually carry much better interest rates than those on auto loans, personal loans, or credit cards. If you think you may qualify, you should apply.

Frequently Asked Questions (FAQs)

Why Do I Need Renters Insurance?

If you’re renting, the landlord may have insurance on the property to cover the building and the landlord’s belongings. However, landlord’s insurance doesn’t cover the renter’s personal property, use of the building, or liability that is your fault, such as if your dog bites a guest. Instead, you must buy renters insurance for protection.

What Is the Difference Between Cash Value and Replacement Cost?

Cash value is usually much lower than replacement cost. Let’s say you bought a backpacking sleeping bag six years ago for $300. The cash value of that bag may only be $150 once it’s six years old, so the insurance company would only reimburse you for that amount. But the cost to replace the bag may be $300 or even more. A renters insurance policy that uses cash value will usually cost you less in premiums. However, your ability to replace your items will be reduced unless your items are brand new and have a high cash value. 

What Is Loss-of-Use Coverage?

Loss-of-use coverage will help you pay for housing if you can no longer live in your rental. Adding this coverage to your policy will make it more expensive, but if you don’t have savings to cover housing in a disaster, you’ll need it. Consider that housing may be more expensive after a major disaster, so the rent amount you previously paid (and budgeted for) may not be sufficient for a new place.

Compare the cost of loss-of-use coverage against the amount you currently pay in monthly rent. Even if you have savings, calculate your ability to pay for housing if a large disaster like a wildfire shuts down businesses in your area for a long period of time.

The Bottom Line

Unfortunately, disasters are common and can be severe and devastating. If you are a renter who can’t afford to replace all of your items after a disaster or find alternate housing, consider getting a robust renters insurance policy. While renters insurance doesn’t cover disasters like earthquakes and floods, FEMA may be able to help if you find yourself in trouble from these events. Be sure to research your options.

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