What Is A Landlord Insurance Policy? (In Nov 2024)

Landlord insurance, also known as a rental dwelling policy is protection against a covered loss to your rental property.

By Licensed Agent:  Sa El PublishedMay 21, 2024  UpdatedAugust 8, 2024

As a landlord, you might be shocked to find out that a homeowners insurance policy won't protect your rental property from a loss. And while making money from a rental property can be really fun and exciting,  understanding how to protect it to avoid any loss is essential.

This is where rental property insurance comes into play.

In this post today, I will help you understand what landlord insurance is as well as how it works and when you need it.

What Is A Landlord Insurance Policy?

Landlord insurance is protection against a covered loss to your rental property and liability issues if someone gets injured on your property. It is often called buy to let home insurance or rental dwelling policies and also provides a layer of extra protection because it treats your rental properties as a business. 

Top 5 Best Landlord Insurance Companies

1. Steadily

2. Geico

3. Progressive

4. Allstate

5. State Farm

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Get quotes and sign up online or get help from a licensed agent, we are here if you need us. 

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How Much Does Landlord Insurance Cost?

The national average cost of Landlord insurance is around $126 per month in the United States, which is around 25% more than a comparable homeowners insurance policy according to recent studies. 

What Determines The Cost Of A Rental Dwelling Landlord Insurance Policy?

There are several factors that will determine what your rental property insurance will cost and they are very similar to what determines the cost of homeowners and renters insurance policies. 

These factors are: 

  • The location
  • If there is a swimming pool or not
  • The size of the building and the number of rental units
  • The age and condition of the property, (Like, is wiring up to code?)
  • Security features installed, such as fire sprinklers, gates, alarms, etc
  • the specific policy you purchase and The Size of The policy

One of the best features about landlord insurance is that it can be written off as a business expense on your taxes. It is one of the few ways that homeowners insurance is tax deductible.

After speaking with the guys at Buttonwood property management along with recommending landlord insurance they also advise landlords to offset capital expenses or to improve their property, utilities,  property losses.

What Does Landlord Insurance Cover?

Your landlord insurance policy will cover the building and property, but expand on liability coverage to make sure you don't have to deal with legal fees.

There is also income loss protection if you are unable to rent out a room or building if it becomes uninhabitable for a certain amount of time.  A great landlord insurance policy should have three core and comprehensive protections; we break them down below. 

Does Landlord Insurance Cover Tenant Damage?

Yes; landlord insurance covers tenant damage; in-fact; you are covered if your real estate or furniture is damaged from:

  • fire
  • vandalism
  • earthquake
  • natural disaster
  • irresponsible tenants
  • electric / gas malfunction

I recommend going for a policy that offers replacement cost or replacement value coverage instead of actual cash value coverage.  

Does Landlord Insurance Cover Eviction?

Yes; Landlord insurance can help with the costs of legal fees associated with tenant evictions. Tenant landlord insurance will also cover things such as: 

  • a sink hole
  • mold
  • termites
  • rat infestation
  • irresponsible tenants
  • electric / gas malfunction

Your rental default insurance would cover the rent money that you would be missing out on if a renter was currently occupying the property.

Does Landlord Insurance Cover Tenant Injury?: 

The liability protection works like it does with homeowners insurance, it covers the medical or legal costs that might come if a tenant or visitor suffers an injury due to a property maintenance issue such as:

  • tenant injury
  • icy walkways
  • architectural collapse
  • Out-of-control hive of wasps

What Does Landlord Insurance Not Cover?

The list goes on for all the reasons you need to own a landlord insurance policy if you rent homes as a business. However, there are some things that the policy does not cover and these things are:

Maintenance And Equipment Breakdowns

If the furnace or dishwasher in your rental property breaks down, you'll likely have to pay out of pocket for any necessary repairs or replacements.

Property You Share

According to the National Association of Insurance Commissioners (NAIC), landlord policies are designed for "non-owner-occupied" property.

This means that if you have someone renting in the basement of your home, a landlord insurance policy will not work for them.

You should check with your home insurance company and see if you can add coverage to your homeowners policy for the section of your property you're renting.

Tenants' Personal Property

Your tenants need to have their own separate renters insurance policy if they want to make sure their personal property is protected from a loss while renting at your property.

Landlord insurance will not cover their personal property nor will it cover their personal liability issues.

It is becoming standard for landlords to require renters insurance which probably will eventually become industry standard. 

Homeowners Insurance Vs Landlord Insurance

Homeowners insurance policies cover a lot of things – damage to your personal property, theft, liability, loss of use, and more.

Homeowners insurance covers damage to the structure of your home as well as surrounding structures; however, while homeowners insurance covers your home, it won’t cover a residence you rent out.

And here's the thing:

Personal liability coverage won’t extend to business activities, and neither will personal umbrella policies.

This means that if your tenant is hurt while renting at your property a basic homeowners policy will not cover you for that.

Homeowners Insurance

  • Covers Mortgage Payments For Loss Of Use
  • Covers You If Guest Is Hurt At Your Home
  • Covers Dwelling & Personal Property
  • Protects Your Home & All Things Inside

Landlord Insurance

  • Cover You For Lost Rental Payments
  • Cover You If Tenant Is Hurt On Property
  • Covers Only The Dwelling / Liability
  • Doesn't Protect Renters Personal Property

THE SIMPLY INSURANCE WAY

Landlord Insurance made easy!

Agents Available To Assist

Get quotes and sign up online or get help from a licensed agent, we are here if you need us. 

Unbiased, expert advice.

Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.

Coverage in minutes.

You can get landlord insurance coverage within minutes of getting your quotes and applying.

Landlord Insurance Vs Renters Insurance

Landlord insurance actually has more in common with home insurance because it covers the actual building.

However, renters insurance is still an important part of coverage. 

Most people assume that their landlords policy covers them; however, that couldn't be further from the truth.

Landlord insurance doesn't cover your tenants personal property in the event of a covered loss.

And even though renters insurance isn't legally required in most states, a landlord can require you to have coverage before they will rent to you.

Imagine a property burning down, you lose your home and your renter loses all of their possessions.

Your landlord insurance policy will cover the cost of their rent and start rebuilding your property but they will be left without anything.  

To avoid this headache it is best to make sure your renters have a renters policy, it will protect you both in the end.

Landlord Insurance

  • Cover You For Lost Rental Payments
  • Cover You If Tenant Is Hurt On Property
  • Covers Only The Dwelling / Liability
  • Doesn't Protect Tenants Personal Property

Renters Insurance

  • Covers Relocating For Loss Of Use
  • Covers You If Guest Is Hurt At Your Home
  • Covers Only Personal Property & Liability

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Take Action

Hopefully you now understand what rental property insurance or landlord insurance is and how it works. If you don't have coverage on your properties you are putting yourself at a huge risk and disadvantage.

Don't waste any time, click on any of the the buttons above to get some quick quotes and immediate coverage.


ABOUT THE AUTHOR

Sa El

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 16 years of experience in the industry. He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.