The 2022 landlord insurance guide you may want to look at before renting your home

With real estate a key rule is to always protect your property from harm. Landlord insurance is an essential part of being a landlord and safeguard your important investment. Rental property insurance is one of the best ways to protect your home while you’re renting it out.

As a landlord you need a different type of home insurance policy. Your standard homeowners insurance policy just might not cut it for what you need. If you rent property out you take on certain risks that are out of your control. This is one of the major reasons why you should get rental property insurance protection. 

What’s the difference between homeowner and landlord insurance

Rental property insurance and homeowners insurance is very similar but also very different and should be used for the appropriate occasion. If your home is owner occupied and it is your primary residence, you probably just need homeowners insurance coverage.

On the other hand if you plan to rent out the home full-time then you may want to consider landlord insurance also known as rental property insurance. Keep in mind as a landlord you may not have coverage with just your standard homeowners insurance policy if a tenant creates damage on the property.

Rental property insurance can protect you from fire, severe weather, lightening and other covered perils. Landlord insurance can also cover you for liability claims if someone is hurt or injured on your property. 

Landlord insurance Basics

With rental property insurance there is 3 basic coverages. The three landlord insurance policies you should try to familiarize yourself with free DP-1,DP-2, and DP-3. The DP-3 is the most comprehensive coverage of the three. The DP-1 is the one that covers the least. The DP-3 will also cover more perils than the others. 

Rental property insurance policies do not cover the contents of the homes. Usually this responsibility will fall on the shoulders of the tenant. Although, the DP-3 will cover the landlords property. This usually includes items such as furniture and appliances. The DP-3 will also help to reimburse you for any lost rental income if your tenant is unable to use the home which stops the rent payments. 

Basic landlord insurance insurance features to keep in mind:

• Property protection (structure)
• Personal property protection (contents)
• Liability
• Rental loss protection (only if the unit is un-habitable for various reasons)
• Flood
• Acts of nature (be sure to ask your broker what is covered, and what isn’t)

So what is the cost of rental property insurance?

The cost of landlord insurance can vary from insurance provider to insurance provider. It can also change due to the zip code you’re in or your claims history. There are many factors that will help to determine your rate. 

If we were to give you a rough estimate it would be that landlord insurance is usually about 15% higher than your homeowners insurance policy. The national average for homeowners insurance is around $1,300 annually. Which is about a $195 increase which would bring the national average for landlord insurance around $1,495 per year. 

Landlord insurance costs a little more than homeowners insurance due to the added risks you take on. Other factors that may adjust the cost of landlord insurance may be:

• Security features 
• Age and condition of the property
• Smart home devices that provide early warnings of potential issues
• Number of rental units 
• Location
• Safety equipment on the premise
• High-risk features such as wood fireplaces, pools, and hot tubs
• Long-term vs short-term tenants (different coverage is needed for each case)

Landlord Insurance Sacramento 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