Rental Property Insurance: A Simple Guide to Landlord Insurance

Some homeowners may believe that their standard homeowners insurance policy will cover them for tenant damage if they rent out their home. This isn’t exactly the case. If you rent out your home, apartment, condo or vacation rental you may want to consider landlord insurance.

Why Do You Need Landlord Insurance

Most standard homeowners insurance policies will only cover owner occupied homes. So if you plan on renting out the home you do not live in full time, rental property insurance may be a necessity. Typically renters are not held liable if a large appliance breaks-down, a visitor injures themself on the property, a fire breaks out and burns the home down, or a thief steals all of the furniture. Which means you could be out of a lot of valuable property needed for the home.

This is one of the major reasons you need a landlord insurance policy in place. You may want to consider what you need before looking for the best price. It’s a good idea to address and protect against risks that you may encounter.

What Does Landlord Insurance Cover?

A solid and comprehensive rental property insurance policy will have 3 different core coverages:

Property damage:

This portion of your coverage will protect the actual structure of the home and furnishings. It will protect those items from fire, electric/gas malfunction, earthquake, vandalism, or irresponsible tenants.

Loss of rental income:

If a disaster were to happen that makes the home uninhabitable due to severe mold, termites, a rat infestation, or a sinkhole or another covered peril, this part of your landlord insurance policy may provide temporary rental reimbursement to cover the rental income lost. 

Liability protection:

This portion of your landlord insurance coverage will cover medical and legal fees if someone is hurt or injured on the property and sues you for damages. 

Additional landlord insurance coverage

There are many different add-ons, endorsements and riders that can come with a landlord insurance policy. 

Guaranteed income insurance:

This will help to cover rent for one moth if a tenant comes up short on the rent. 

Flood insurance:

Much like homeowners insurance a standard landlord insurance policy will not cover flood damage. If you need coverage for this risk you may want to look into flood insurance.

Emergency coverage:

This feature can help to cover costs if a tenant needs something fixed such as a dishwasher or is locked out and needs a locksmith. 

Additional construction expenses:

If you need to bring a building up to code after it was damaged this additional insurance option can help to cover the costs. 

How Much Does Landlord Insurance Cost?

The average cost of homeowners insurance in the United States is $1,899. Although this is a national average and the costs of homeowners insurance can vary from insurance provider to insurance provider and state to state. The age of your home, the size of your home, risky features and more will all play a role in determining the rate you end up with. 

Rental properties are typically more prone to damages and claims. Because of this simple fact landlord insurance policies can run higher than a standard homeowners insurance policy. A bench mark to go with is roughly 15% more than homeowners insurance. 

Landlord insurance quote

If you would like a custom landlord insurance quote, please call us today at 916 313 6100