Home Insurance Quotes for Rental Property: Top Picks
What Is Rental Property Insurance (Landlord Insurance)?
Rental property insurance, more commonly known as landlord insurance, is a specialized policy designed for property owners who rent out their homes, condos, apartments, or other dwellings. Unlike standard homeowners insurance, which covers personal residences, landlord insurance protects rental properties against risks unique to being a landlord-like tenant-caused damages, loss of rental income, and extended liability exposures. If you’re currently renting out property or considering becoming a landlord, having the right landlord insurance is crucial for safeguarding your investment and peace of mind.
It’s important to understand the critical distinctions between landlord insurance and homeowners insurance. While homeowners insurance focuses on the structure and personal belongings of an owner-occupied home, landlord insurance extends coverage to the rental structure, landlord’s personal property used to service the rented dwelling, liability protection from tenant injuries, and optional loss of rental income.
To learn how landlord insurance and renters insurance work together, or to explore what typical home insurance includes, check out our guide: What Does Home Insurance Cover? – 7 Key Areas Explained.
What Does Landlord Insurance Cover?
Landlord insurance delivers more comprehensive protection than homeowners insurance, specifically tailored to the unique risks of rental properties. Coverage typically includes:
- Dwelling Coverage: Protects the structure itself against damages from fire, wind, hail, lightning, vandalism, and sometimes accidental tenant-caused destruction.
- Landlord’s Personal Property: Covers appliances, maintenance equipment, or tools provided for tenant use, but not the tenant’s personal belongings.
- Landlord Liability Insurance: Shields you if a tenant, guest, or visitor gets injured on the property and sues you for damages.
- Loss of Rental Income: Also known as fair rental value coverage, pays you lost rent if your property becomes uninhabitable due to a covered peril.
- Optional Add-ons: Extend coverage with endorsements for umbrella liability, burglary, building code upgrades, or even flooding and earthquakes with separate policies.
Example: If a kitchen fire damages a rental unit, dwelling coverage would pay for repairs, while fair rental value coverage helps recover lost rent during renovation.
To review tips on protecting your property further and keeping costs in check, see 5 Proven Ways to Lower Your Home Insurance Costs.
Common Add-ons and Endorsements
- Extended Replacement Cost: Increases your dwelling limit to reflect higher rebuild costs after disasters.
- Umbrella Liability: Provides an extra layer of liability coverage above standard policy limits.
- Vandalism and Burglary Protection: Fills gaps left by standard commercial policies.
What’s Not Covered by Rental Property Insurance?
Although landlord insurance is robust, it does not cover every possible risk. Common exclusions include:
- Tenant’s Personal Belongings: Renters need their own renters insurance to protect personal possessions.
- Normal Wear and Tear or Routine Maintenance: These are the landlord’s ongoing responsibility.
- Vacancy for Prolonged Periods: Properties vacant more than 30-60 days may not be covered unless you add specific endorsements.
- Floods and Earthquakes: Typically require separate policies or add-ons.
- Acts of War or Government Action: Almost all policies exclude such claims.
Understanding these limits is essential. If you’re interested in what is and is not included under regular home insurance, learn more about coverage exclusions here.
How Much Does Rental Property Insurance Cost?
The landlord insurance cost varies based on several factors, but the national average is about 20-30% higher than standard homeowners insurance due to the increased risks of rental situations. On average, landlords pay between $1,200 and $2,000 per year for rental property insurance, though this can fluctuate greatly depending on specific circumstances.
Main Cost Factors
- Property Location: Properties in high-crime areas or regions prone to natural disasters will face higher premiums.
- Age and Features of the Property: Older homes or those with outdated electrical/plumbing systems may have increased costs.
- Amount of Coverage and Add-Ons: More dwelling coverage, liability, or additional endorsements raise premiums.
- Deductible Chosen: A higher deductible lowers the annual premium, but increases your out-of-pocket expenses during a claim.
- Claims History and Credit: Fewer past claims and a better credit score can result in lower premiums.
Example: A landlord with a single-family home in a low-risk neighborhood who opts for a higher deductible and bundles policies could save hundreds each year on premiums. For more practical savings strategies, try these 5 Proven Ways to Lower Your Home Insurance Costs.
Typical Deductibles & Premiums
| Coverage | Average Annual Premium | Typical Deductible |
|---|---|---|
| Basic Dwelling | $1,200 – $1,800 | $1,000 |
| Extended Coverage (+ liability & loss of rent) | $1,500 – $2,200 | $1,000 – $2,500 |
Always balance the deductible with what you can afford out of pocket in the event of a claim.
How to Get and Compare Home Insurance Quotes for Rental Properties
Getting the best rental property insurance starts with comparison shopping. Follow these steps to maximize coverage and minimize cost:
- Gather Property Information: Include construction details, year built, square footage, safety features, current occupancy, and past claims. Download our detailed checklist to streamline this step before requesting quotes.
- Know Your Coverage Needs: Decide what level of dwelling, liability, and loss of rental income protection suits your situation-plus whether you want add-ons like umbrella liability or extended replacement cost.
- Request Multiple Quotes: Reach out to several reputable insurers and use online tools to compare landlord insurance offerings.
- Examine Deductibles and Premiums: See how changing your deductible affects premium costs.
- Check Company Ratings: Look for customer satisfaction scores and financial strength from agencies like AM Best or J.D. Power.
- Require Tenants to Carry Renters Insurance: This can minimize your liability and ensure tenants’ belongings are covered.
If disaster strikes and you need to file a claim, our guide on how to file a home insurance claim after a hurricane offers a step-by-step approach and tips for smooth claims processing.
Pro Tip: Always review policy exclusions and limits. Reread the specifics on fair rental value or loss of rent to ensure you aren’t left without income after a covered loss.
Top Landlord Insurance Companies and Their Features
| Insurer | Unique Features | Sample Annual Premium |
|---|---|---|
| State Farm | Customizable dwelling, liability, and personal property add-ons; discount bundling with auto policies | $1,400 |
| Allstate | Optional vandalism protection; claim-free discounts; online quote comparison | $1,600 |
| American Family | Unique deduction-reducing endorsements; specialized property manager support | $1,500 |
| Farmers | Umbrella liability options; innovative smart home premium discounts | $1,500 |
| Liberty Mutual | Flexible coverage for short-term rentals; strong claims reputation | $1,450 |
When selecting the best landlord insurance companies, look for flexible add-ons, simple claims service, responsive support, and, if possible, discounts for bundling with other policies.
Frequently Asked Questions About Rental Property Insurance
Do I need landlord insurance if I only rent out my property occasionally?
Even short-term rentals, such as vacation listings, expose you to increased risks. Most home insurance policies exclude claims if the property is rented, so a landlord policy is strongly recommended. Some insurers, like Liberty Mutual, offer special coverage for short-term and vacation rentals.
Is landlord insurance required by law?
It’s not legally mandated everywhere, but your mortgage lender or local jurisdiction may require coverage. Even if not mandatory, protecting your investment with landlord insurance is a smart business decision, as it covers property damage, liability, and loss of rental income risks.
Should tenants hold renters insurance?
Yes, requiring tenants to have renters insurance ensures their belongings are protected and reduces the likelihood of liability disputes. Many landlords now make this a lease prerequisite-benefiting both parties.
How can I lower my landlord insurance costs?
Choose a higher deductible, bundle policies, install safety features (smoke alarms, deadbolts), and maintain a good claims history. For more actionable tips, read 5 Proven Ways to Lower Your Home Insurance Costs.
What’s the difference between dwelling coverage and liability coverage?
Dwelling coverage pays to repair or rebuild the rental structure itself after fires, storms, or other covered losses. Liability coverage protects you financially if someone is injured on your property and files a lawsuit. Both are fundamental pillars of a robust landlord insurance policy.
