As a resident of a professionally managed apartment community, it’s likely that your lease requires you to have “personal liability insurance.” The most common and easiest way to do this is with a Renters Insurance policy. But does your renters insurance really provide all the coverage that you need? What about the coverage that your lease requires? Effective Coverage’s research shows that many policies don’t cover water damage to your apartment, leaving you exposed to significant financial risk.
Why Is Water Damage Liability A Concern?
Renters insurance policy forms are fairly standardized in most states. The base policy form covers you for almost any bodily injury or property damage that you cause outside of your apartment. Liability for damage to your “rented premises” is covered in an exclusion, but then coverage is carved back for property damage caused by fire, smoke, or explosion.
Liability for water damage to the rented premises – also known as “your apartment” – is not part of that carve back, so there’s no coverage. Renters insurance policies often exclude broadly and then use specific language to define exactly what is covered, or under what circumstances coverage applies. Policies are written to only be interpreted one way, ideally. Clarity is crucial when it comes to a coverage determination.
Liability for water damage to your apartment can come from a number of sources. A leak or overflow of your shower could cause significant damage. In one particularly memorable claim, someone used a fire sprinkler as a clothes hanger with predictable results. Walking away from a bathtub while it’s filling has caused many an overflow. Your day-to-day life can easily cause water damage that wouldn’t be covered.
What About Water Backup?
Water backup of sewers, sinks, and drains is excluded from coverage on the standard renters insurance policy. There are two primary reasons for the exclusion. First, if the cause is outside your home, the damage is potentially unlimited if you’re not at home to stop it. Insurance companies are in the business of assuming risk, but that risk must be quantifiable. Second, water backup can often be prevented easily. Make sure the toilet stops running before you leave the bathroom. Keep your sink drains clear. Keep your kids and their toys away from unsupervised plumbing fixtures. Straightforward stuff, really. But negligence happens, and water backup losses occur every day. How can you protect against water backup or liability for water damage? Can the policy form be amended to cover these losses?
Can A Renters Insurance Policy Be Amended To Add Coverage For Liability For Water Damage Or Water Backup?
Yes! It’s easy to amend your renters insurance policy with an endorsement. An endorsement is a pre-written bit of policy language which amends the policy and replaces the default verbiage with different coverage in some way. With water backup, the endorsement is straightforward and offered by almost every company. An endorsement for water backup should cost you just a few dollars a year, and it’s a worthwhile investment.
In the case of liability for water damage to rented premises, companies handle this with more variation. Effective Coverage is able to offer an endorsement for water damage liability which also includes water backup coverage. This means that you’re protected from and defended against liability for damage to the rented premises from smoke, fire, explosion, and water.
How Do I Know If My Renters Insurance Covers Water Damage?
How do you know if your renters insurance covers water damage to your apartment? Your declarations page and the policy document will tell you. With Effective Coverage, you’ll see one of two things on your declarations page. Either you’ll see the water backup endorsement on its own, or you’ll see something called the “enhanced home” endorsement. Enhanced home includes water backup, liability coverage for water damage to rented premises, as well as open perils coverage. Open perils coverage means that your personal property is protected against direct physical loss or damage from any cause that has not been excluded. Exclusions are limited and include nuclear hazard, war, inherent vice or defect, and insect or vermin infestation. It’s worth noting, however, that open perils coverage does not remove the flood exclusion. Water moving along, through, or under the ground would not be covered.
If your property management has asked you to get coverage for apartment damage due to water, Effective Coverage can make that part of your policy. It’s fast and easy to get covered. Just call (800)892-4308 or click above to get covered in under a minute. We’ve made the process quick and painless because we believe that everyone should have access to the protection of renters insurance at an affordable price.