Landlord insurance is for homeowners who rent out their property. It covers a landlord's property and liability.
You can tailor your rental property insurance needs by adding riders such as loss of income insurance, non-occupied dwelling endorsement and natural disaster coverage.
In this article
How landlord insurance works
Landlord insurance is there to protect you and your property. Depending on the landlord insurance policy you choose, it may cover only common risks like fire and hail. A homeowners insurance policy will provide limited coverage if you're renting out your property, which is why we recommend purchasing landlord insurance.
What does landlord insurance cover?
Landlord insurance can cover you for the following:
- Property damage: Landlord insurance covers damage caused by covered perils to the structure of your property.
- Liability: If a tenant is injured due to your negligence, they could possibly sue you for liability. Liability coverage can cover the tenant's medical expenses, as well as any legal fees that may arise.
- Loss of income: If your tenants have to move out due to repairs being done on your rental property after a covered peril occurs, loss of income coverage may cover you for that lost rent. Not all standard landlord policies cover loss of income.
- Structures external to your property: Landlord insurance can also cover external structures like sheds, detached garages, fences and more.
What doesn't landlord insurance cover?
Landlord insurance doesn't cover your tenant's belongings or personal property. They will need to purchase a separate renters insurance policy to cover their possessions. Landlord insurance also doesn't cover equipment repairs due to maintenance and breakdown issues. Nor does it cover damage due to floods and earthquakes.
Other landlord coverage to consider
While landlord insurance covers a wide range of issues, it is by no means full coverage. Higher liability limits, as well as protection from natural disasters and other possible issues that can affect your property, should be considered as well.
- Umbrella policies: If your liability coverage limit seems low, buying an umbrella policy can be an excellent solution. Umbrella policies provide higher liability limits.
- Natural disaster coverage: You will need to buy separate insurance policies for earthquake or flood insurance. If you live in an area with a history of these disasters, you should consider this coverage.
- Vandalism coverage: You can purchase additional coverage to protect you if your belongings are vandalized.
- Building code coverage: If you have an older home, there is a chance that parts of the house that get damaged and need repair may need to be brought up to code. Buying this insurance rider can help pay for the improvements.
How much does landlord insurance cost?
According to the Insurance Information Institute, a landlord insurance policy generally costs about 25% more than a standard home insurance policy. Factors that can affect your landlord insurance rates include:
- The age of the house
- Where the house is located
- Number of units rented in the house
- Any security features you've installed
Where do I get landlord insurance?
Probably the best place to buy landlord insurance is through your current home insurance company. Having the benefit of working with an insurer you already use can make the process easier. Also, it gives you the opportunity to see if you can bundle your home insurance with the landlord insurance on the rental. This could save you money on both policies. If you haven't connected with an insurer about landlord insurance, we recommend:
- Liberty Mutual
- State Farm
Frequently asked questions
You are not required by law to purchase landlord insurance. However, if you have a mortgage, your lender may require you to have it.
You can save on your landlord insurance policy by taking advantage of discounts. If you have certain smart home devices and security features in your home, you may be eligible for discounts. You may also be able to save if you have another insurance policy with the company that provides your landlord insurance.
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