Who Pays For Flood Damage to a Rental Property?

11/11/2020 (Permalink)

Flood damage in Christiana, TN area

Understand Each Party's Responsibilities

When a rental property floods, it’s not always clear what happens next. Many leases don’t include any provisions addressing potential disasters. It’s helpful to understand each party’s responsibilities, as well as the roles that property insurance and renter's insurance play in covering the costs of flood damage.

Owner’s Responsibilities
After a flood, it’s ultimately the landlord’s responsibility to get the property back into a habitable condition. This means the owner must

Repair any structural damage to the building.
Ensure that the property has been fully decontaminated in accordance with applicable health and safety guidelines.
Replace or repair any damaged appliances or other fixtures that were included in the lease.

Most restoration expenses and repair costs should be covered by the landlord’s property insurance; however, some property insurance policies specifically exclude flood damage caused by rising water or storms. If the property is within a federal flood zone, the landlord will typically have a separate flood insurance policy to cover those expenses.

Renter’s Responsibilities
In the event of flooding, a tenant is responsible for anything inside the property that was not included with the property as part of the lease. In most cases, renter's insurance will cover damage to things like furniture and clothing. Rental insurance typically also covers the cost of alternate housing, if necessary, until flood damage remediation is complete.
Like property insurance, most rental insurance policies do not cover flood damage caused by storms or rising water. However, there are specific flood policies available to renters, especially for properties in flood-prone areas. FEMA also offers some disaster relief options for renters impacted by storm-related flooding. Renters can check FEMA’s website to see whether Christiana, TN, is included within a federally declared disaster area.
Flooding can be a gray area when it comes to insurance coverage for property owners and for tenants. If the rental property is in a flood zone, tenants should consider purchasing a flood policy to cover flood damage not covered by ordinary renter's insurance.