NFIP Tenant Coverage

NFIP tenant coverage refers to flood insurance policies available to tenants (renters) under the National Flood Insurance Program (NFIP). This type of coverage is designed to protect the personal property of tenants and, in some cases, improvements or betterments they have made to their rented premises.

Waiting Period

Policies typically have a 30-day waiting period before coverage becomes effective, unless the purchase is tied to a loan or certain map changes.

Coverage Options

Tenants can purchase contents coverage under the following NFIP policy forms:

• Dwelling Form: Designed for residential renters, including those in single-family homes, apartments, or condos.
• General Property Form: Available for tenants renting spaces in non-residential buildings.

Deductibles

Tenants/lessors must select a deductible amount, which applies separately to building coverage (if applicable) and contents coverage.

Contents Coverage

Under the Dwelling Form and General Property Form, tenants may purchase contents coverage, which includes coverage for building improvements and betterments.

• The maximum amount payable for improvements and betterments in the building occupied by the policyholder is 10 percent of the contents coverage amount shown on the declarations page.
• Improvements and betterments include fixtures, alterations, installations, and additions that become part of the tenant-occupied building, if acquired or made solely at the tenant’s expense.
• Use of this option does not provide an additional amount of insurance over the amount of contents coverage shown on the declarations page. Coverage for contents solely owned by the tenant/lessor must be on a separate policy in the name of the tenant/lessor only. Refer to the SFIP Article III.B.6.

Contents Coverage Limits

• Residential tenants/lessors: Up to $100,000 in personal property coverage.
• Non-residential tenants/lessors: Contents values up to a maximum of $500,000.

Improvements and Betterments

For tenants who have made improvements to their rented space, NFIP policies provide limited coverage for these alterations:

• Dwelling Form and General Property Form includes coverage for building improvements and betterments made by the tenant/lessor.
• Coverage is limited to 10% of the total contents coverage limit shown on the policy's declarations page.

Insurable Interest

Complex questions of insurable interest can arise involving mixed-use buildings with multiple forms of ownership. The NFIP can cover such a building under either a single policy or multiple policies, depending in part on whether a single SFIP form or multiple forms apply.

When writing a single policy, the insurer must list all building owners as named insureds on the policy. When writing multiple policies for buildings at the same location, the insurer is responsible for maintaining detailed information describing the ownership and insurable interest that pertains to each policy. This prevents issues of duplicate coverage or claim payments above statutory limits.

Rent-to-Own Agreement

If a tenant has sufficient interest in the property under a rent-to-own agreement, then the landlord/owner and the tenant both have an insurable interest. Each of them may be named insureds under the flood insurance policy. A separate policy in the tenant's name only should be secured to cover the contents owned solely by the tenant/lessor.

Lease Requirements to Purchase Building Coverage

If a lease agreement requires a tenant to purchase building coverage, the building owner must be named on the policy but the lessor may also be named on the policy (although they do not have an insurable interest themselves).

Coverage for contents owned by the lessor must be written on a separate policy in the name of the lessor only. Lessors may not purchase building coverage if the owner or another party has purchased NFIP coverage on the same building.

This page contains information about the NFIP. Find more NFIP Resources.