Rental Property Insurance: How Much Does Landlord Insurance Cost and What Does It Cover?

The cost of landlord insurance will depend on many variables. The area you live in, the size of your home, the amount of insurance you need, and the landlord insurance provider to name a few. On average landlord insurance is around 25% more expensive than homeowners insurance according to the Insurance Information Institute.

Why does landlord insurance cost more than homeowners insurance?

Landlord insurance will cover risks that homeowners insurance will not. One of the main reasons for the increase in cost is due to the fact of who lives in the home. Most insurance providers have noticed fewer claims from owner occupied homes. They have also noticed lower average costs and loss amounts than rental properties. The reality is, there really is no better tenant than yourself. You’ll treat the property like it’s yours, which it is. 

The other factor is the amount of liability insurance included. With rental property insurance you have much higher coverage levels that are designed to protect the landlord from lawsuits, legal fees in the event that a guest is hurt or injured on the property. On average a landlord may carry more than or up to one million dollars for a liability limit.

Landlord insurance discounts

Rental property insurance does have a few discounts but please keep in mind that they may not be as abundant as auto insurance or homeowners insurance. There are auto insurance discounts for good grades, and safe driving. With rental property insurance those discounts do not exist.

Instead, take a glance at these two ways to save:

• Safety Devices. Install burglar alarms, fire sprinkler systems, or motion sensors to drive down the price

• Multiple Properties. Bundle landlord insurance for all your rentals with the same company to lower your premium on each policy

Does my homeowner’s insurance policy cover my rental property?

It depends on how long and often you rent out the home. If you’re a full time landlord then rental property insurance is essential. 

Check out these three scenarios to help you pick:

• Frequent Short-Term Rentals. For Airbnb, VRBO, or another setup where various guests stay for a brief time like a bed-and-breakfast or hotel, you’ll need a commercial insurance policy.

• Infrequent Short-Term Rentals. For rentals of your primary residence for less than 30 days, for example, while you take a vacation, you may use your homeowners policy with your insurance provider’s approval.

• Long-Term Rentals. For periods beyond short-term, such as a typical 6-month or 1-year lease, you should buy a landlord policy.

Landlord Insurance Quote 

If you would like a free landlord insurance quote or have additional questions regarding rental property insurance, please give us a call today at 916 313 6100