Q

My upstairs neighbor flooded my apartment, is that covered by renters insurance?

A

If your upstairs neighbor floods your apartment and your personal property is damaged, then you can file a renters insurance claim, but coverage will depend on what caused the flooding in the first place.

Kara McGinley

Kara McGinley

Published March 6, 2020

KEY TAKEAWAYS

  • Renters insurance will cover damage if your upstairs neighbor floods your apartment, unless the water damage is caused by an excluded peril, like an actual flood

  • Subrogation is the legal right your renters insurance company has to try and recoup their loss, so if your insurer approves your claim they will then contact the at-fault party to attempt reimbursement

  • If the flooding is caused by a pipe or a maintenance issue with the physical dwelling that you live in, your landlord is probably responsible, not your neighbor

One of the realities of living in an apartment building is that you’re sharing your dwelling and living facilities with your neighbors. This means if the elevator is broken, you’re all taking the stairs. If there is a power outage, odds are your neighbor is also sitting in the dark. Living in closer quarters with your neighbors also means there’s a higher chance that they can accidentally cause damage to your belongings.

If your upstairs neighbor floods your apartment and they are at fault for the water damage to your personal property, then you can file a renters insurance claim to try and recoup the costs of whatever was ruined or damaged.

That being said, renters insurance is very specific when it comes to water damage and under which circumstances your claim will be covered. For example, if the water damage is caused by a natural disaster, like a flood, a standard renters insurance policy will not cover it. But if a pipe in your neighbor’s apartment breaks and floods your apartment, then you can file a renters insurance claim to reimburse your loss.

In this article:

When does renters insurance cover water damage caused by your neighbor?

Water damage can be caused in a myriad of ways, but renters insurance only considers water damage a covered peril under very specific circumstances. If your personal possessions are destroyed and your neighbor is responsible for the flooding, or if your landlord is responsible, you can file a renters insurance claim with your insurer and your insurance company will then contact the at-fault party’s insurance company to try and recoup their losses. Your renters insurance premium most likely will not go up since you are not the at-fault party (you should ask your insurance agent or refer to your insurance policy about this just in case).

Whether or not renters insurance will cover specific cases of water damage also depends on if you have an all-peril or named peril policy. All-peril policies will cover basically every peril unless it is explicitly excluded, whereas named peril policies will only cover the perils specifically stated in your insurance policy.

However, no matter which policy you have, renters insurance will cover your upstairs neighbor flooding your apartment if the flood happened in any of the following ways::

  • A pipe froze, burst, and then flooded into your apartment
  • Water leaked from a heating or air conditioning system
  • An automatic fire protection system, like sprinklers, accidentally caused damage
  • Bulging, burning, cracking, leak, or rupture of a hot water heating system caused water damage

Renters insurance will also cover damage by proximate cause. Proximate cause is when a series of separate events results in damages. For example, renters insurance will not cover damage caused by rainwater, but if the roof of your apartment building caves-in due to the weight of snow (which is a covered peril) and then it rains and the rain floods your upstairs neighbor’s apartment, which then floods your apartment, renters insurance will cover it since the rain damage wouldn’t have happened without the roof first caving in.

Learn more about what renters insurance does and does not cover.

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What part of renters insurance covers water damage?

Renters insurance is made up of three different parts:

  • Personal property coverage: Financial protection if your belongings are stolen, damaged, or destroyed by a covered peril.
  • Personal liability coverage and medical expenses: Coverage if you are responsible for damage to someone else’s property or if someone gets injured while in your home.
  • Loss-of-use coverage: Coverage if your home becomes uninhabitable and you need to temporarily live elsewhere.

All three coverage aspects of your renters policy will cover water damage, but it will depend on what caused the water damage in the first place.

Personal property coverage and water damage

Renters insurance includes personal property coverage, so if your stuff is stolen, destroyed or damaged by a covered peril, then your insurer will reimburse you for the loss. Before filing a claim for water damage, you should contact your insurance company to go over your policy and learn if the water damage caused by your upstairs neighbor is considered a covered event. If your renters insurance approves the water damage claim, then you will be paid out one of two ways.

  • Actual cash value: You will be paid out as if your belongings were new
  • Replacement cost: The depreciated value of your belongings will be factored into your reimbursement, meaning the age, condition, and overall wear-and-tear of your belongings at the time of the loss will be factored into the pay out.

Loss-of-use coverage and water damage

If your home becomes uninhabitable due to the damage caused by your neighbor flooding your apartment,the loss-of-use coverage in your renters insurance policy will pay for you to live elsewhere, like at a nearby hotel.

Loss-of-use coverage also includes additional living expenses. If you are spending more money while you are living elsewhere — be it because you are eating at restaurants more often since you don’t have a kitchen or because you are spending more money on gas — your renters insurance will reimburse you for the accrued expenses, up to your policy’s limits. You should keep all your receipts in order to prove and keep track of your spending while your home is being repaired.

Personal liability coverage and water damage

If your neighbor is responsible for the water damage, say because they left the bathtub running and fell asleep, then they should file a claim with their renters insurance company. The personal liability coverage of a renters insurance policy covers damage that the policyholder is responsible for or injury that the policyholder causes.

If you file a renters insurance claim because the upstairs tenant flooded your apartment and your insurer pays the claim, then your insurance company is going to try to recoup their loss from the at-fault party. This process is called subrogation — it’s the legal right your renters insurance company has to try and recover their loss. Basically, your renters insurance company is going to try and get their money back from the at-fault party. Your neighbors renters insurance liability coverage will cover this cost.

When does renters insurance not cover water damage caused by your neighbor?

Your renters insurance will not cover the damage if it wasn’t actually caused by your neighbor. Most renters insurance policies won’t cover the following causes of water damage:

  • An outside flood caused the damage and they are therefore not liable
  • Sewage water back-up or overflow
  • Your apartment has been vacant for over 30 days (depending on your policy)