What does renters insurance cover in Michigan?

Key facts

• A landlord's property insurance covers the building and the landlord's belongings, and not a renter's belongings.
• A renters policy names the perils it pays for, such as fire, smoke, windstorm, hail, theft and vandalism.
• Additional living expense coverage pays the difference between your extra living costs and your normal living costs.
• The federal flood program sells a contents-only policy for renters with up to $100,000 of coverage.
• That federal rental flood cover excludes subgrade basements.
• Actual cash value pays for your belongings minus depreciation, up to your policy limit.

Which policy looks at which loss

What does a renters policy cover in Michigan?

A renters policy covers your own belongings against the perils the policy names. The federal flood program lists fire, smoke, windstorms, lightning, hail, rain and snow damage, theft and vandalism as examples. Your own policy has its own list, and that list decides.

The policy is for your things. Furniture, clothes, electronics, dishes and bedding are belongings. The landlord owns the building, so the building is on the landlord's policy.

Policies pay for belongings in one of two ways. Actual cash value pays for an item minus depreciation, up to your policy limit. Replacement cost pays what it costs to replace the item, with no deduction for depreciation, up to your limit. Your declarations page shows which one you have.

1. Find the declarations page in your policy packet.
2. Write down the personal property limit and the deductible.
3. Look for the words actual cash value or replacement cost.
4. Read the list of perils and the exclusions section. Note whether flood, water backup or mold appear there.
5. Make a home inventory. Walk each room with your phone and record what you own.

What does my landlord's insurance cover?

Your landlord's property insurance covers the structure and the landlord's own belongings. The federal flood program states that it does not cover a renter's belongings, use of the building, or the renter's liability for injury or damage.

If a fire or a burst pipe ruins your couch, look to your own renters policy for the couch. Tell your landlord in writing about damage to the unit, because the landlord handles the building.

Some leases ask the tenant to carry insurance. Read the clause word by word. A renters policy is written for your belongings, and it does not include the building. If a lease asks you to insure the whole structure against fire or wind, that is a different kind of policy. Have a Michigan attorney or a legal aid office read the clause before you sign.

Does renters insurance pay for a hotel after a fire?

It can, if your policy has additional living expense coverage and a covered peril makes your home unlivable.

This coverage pays the gap. It pays the difference between your extra living costs and your normal living costs. Your policy wording sets the limit.

A long power outage by itself is a different question. Check the perils list and the exclusions for power failure before you book a room and expect payment.

1. Keep every receipt for the hotel, meals, laundry, mileage and storage.
2. Write down your normal monthly costs, so the extra cost is easy to show.
3. Take photos of the damage before you leave the unit.
4. Before you make any calls, have the damage documented. A local restoration pro does this free.

Does renters insurance cover flood or basement water?

It depends on the policy wording and the endorsements. Read the exclusions section and look for the words flood, surface water and water backup.

Flood coverage for a renter's belongings is its own policy. The National Flood Insurance Program sells a contents-only policy for renters. It insures up to $100,000 of damage to your belongings.

Basement units need extra care. The federal flood program says rental flood cover applies to contents above the lowest elevated floor, and it excludes subgrade basements. If you live in a basement or store things there, read that wording closely.

Water from a burst pipe and water from a flood are different events in a policy. Write down where the water came from and when you first saw it.

What should I do first after fire or water damage in a rental?

Get safe first. Then document everything before anything goes to the curb.

Wet carpet, drywall and furniture can grow mold if they stay wet. Fast drying protects your things.

1. Leave the unit if you see smoke, smell gas or see water near outlets.
2. Take photos and video of every room, the water line and each damaged item.
3. Keep damaged items until the damage is documented. Do not throw them out yet.
4. List each damaged item with its age and what you paid, if you know.
5. Tell your landlord in writing about damage to the unit, and keep a copy.
6. Before you make any calls, have the damage documented. A local restoration pro does this free.

Sources, quoted

Find a pro and keep reading

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