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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
Updated
Landlord insurance is a type of insurance designed to protect property owners who rent out residential properties to tenants. If you own a rental property, you need landlord insurance because a standard homeowners policy won’t cover tenant-occupied dwellings.[1]
Read on to learn about what landlord insurance covers, how much it costs, when you need it, and how to compare policies to find the right coverage for your rental unit.
Landlord insurance protects your rental property’s structure, covers liability claims from tenant injuries, and reimburses lost rental income after damage.
Standard homeowners insurance won’t cover your home if you rent it out.
Landlord insurance costs more than homeowners insurance but provides critical financial protection for property owners who own or manage rental units.
Landlord insurance provides three main types of coverage: property insurance, liability protection, and loss of rental income coverage. Property insurance protects the unit itself, and liability protection covers you if someone sues you.
Unlike a standard homeowners policy, landlord insurance is specifically designed to protect tenant-occupied properties. It also helps cover rent if you can’t rent your property while you make repairs due to damage.
For example, if a kitchen fire damages your rental and forces tenants to move out temporarily, landlord insurance would cover repairs. It would also reimburse you for lost rental income. Similarly, if a tenant’s guest gets hurt on your property and files a liability claim, your policy can pay for medical expenses and your legal costs up to your liability coverage limits.
Property protection works like dwelling coverage in a homeowners policy and protects the physical structure of your rental property. It covers the dwelling and any outbuildings, such as garages or sheds, against perils such as fire, wind, hail, lightning, and vandalism. The coverage also applies to personal property you leave at the home for maintenance or tenant use, such as appliances and lawnmowers.
Choosing the right amount of coverage is crucial because you need enough to repair or rebuild the property if disaster strikes. If your rental property has a mortgage, your lender will likely require you to have enough property insurance to cover the loan amount and protect its investment.
Landlord liability protection may cover you if someone gets hurt at your rental property or a tenant sues you. For example, if a tenant’s guest trips on a broken step and breaks an arm, liability coverage would pay their medical costs and any legal fees — up to the policy limits — if they sue.
Loss of rental income helps replace rent you lose when your property is damaged, and tenants can’t stay while you make repairs. Standard homeowners policies don’t include this protection.
Insurers often call this “fair rental value” coverage, which means it pays the amount you would have collected in rent. The following situations illustrate when it may apply:
A fire damages your rental property, and tenants must move out during repairs.
A burst pipe makes the property unlivable until cleanup is complete.
Vandalism damage requires extensive repairs that force tenants to relocate temporarily.
It won’t protect you against market downturns that leave your rental vacant or situations where you can’t find tenants.
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Landlord insurance won’t cover every instance of damage because policies exclude certain perils and situations. Understanding these exclusions helps you identify gaps where you might need additional coverage. Common exclusions are:
Tenant belongings: Your policy covers the building structure but not your tenant’s personal property — they’ll need renters insurance for that.[2]
Appliance breakdowns: Policies don’t cover mechanical failures from normal wear and tear unless you add a home warranty.
Flood damage: You need separate flood insurance from the National Flood Insurance Program (NFIP) or a private insurer to cover damage caused by flooding.
Earthquake damage: You’ll need a separate earthquake policy or endorsement if your rental is in an area prone to seismic activity.
Intentional damage: The policy won’t cover damage you or your tenants cause on purpose.
Additional policies and endorsements can protect your property against some of these situations, giving you more comprehensive financial protection for your rental investment.[3]
Landlord insurance is generally required whenever you rent out a property to tenants, whether it’s a long-term lease or a portion of your home. You need landlord insurance because a home insurance policy typically won’t cover tenant-occupied dwellings.
In other words, the moment someone else lives in your property and pays rent, your standard homeowners policy may no longer apply. You’ll typically need landlord insurance in the following scenarios:
Long-term rental: If you’re renting out an entire property to tenants on a lease, you must have a landlord insurance policy in place before tenants move in.
Renting a former primary home: Accidental landlords who move out of their home and decide to rent it need to switch from their homeowners policy to landlord insurance.
House hacking or ADU: If you rent out a room, basement apartment, or accessory dwelling unit (ADU) while living in another part of the property, you likely need landlord coverage or at least an endorsement on your homeowners insurance.
Between tenants: Even when your rental sits vacant between tenants, landlord insurance protects your investment from property damage and liability claims. But if the vacancy extends beyond 30–90 days, you may need vacant home insurance instead.
Follow these steps to compare and obtain landlord insurance:
Collect details about your rental property, including square footage, construction type, year built, property value, and current rental income.
Contact at least three insurers or work with an independent insurance agent who can compare coverage options from multiple insurance companies.
Make sure your dwelling coverage amount is high enough to rebuild your property and that your liability limits adequately protect your assets.
Higher deductibles typically mean lower premiums, but make sure you can afford to pay a higher deductible out of pocket if you file a claim.
See whether you can qualify for discounts for security systems, multiple policies, or a claims-free history.
Once you’ve compared options and selected the best coverage, complete your application and pay your first premium to activate coverage.
Landlord insurance is typically 25% more expensive than homeowners insurance because rental properties face higher risks. Landlord insurance premiums can range from $800 to $4,000 annually, depending on your property’s location, value, and coverage needs, according to industry data.
Because insurers assume greater risk with tenant-occupied properties, landlord insurance costs more than homeowners insurance. For example, there’s more potential for property damage, liability claims, and financial losses when you’re not living in the property yourself.
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Many factors affect how much you’ll pay for landlord insurance coverage. Understanding these rating factors helps you make informed decisions that could lower your premium:
Property location: Properties in areas prone to natural disasters or high crime are more expensive to insure. Installing security systems and choosing properties in lower-risk areas can reduce premiums.
Coverage limits: Higher dwelling and liability limits mean higher premiums. Choose coverage that adequately protects your investment without over-insuring.
Deductible: The amount you pay out of pocket before insurance coverage kicks in. Selecting a higher deductible typically lowers your premium.
Claims history: Property owners with multiple past claims typically pay more for insurance. Avoid filing small claims that you can afford to pay yourself.
The key difference between landlord and homeowners insurance is occupancy. Homeowners insurance covers owner-occupied properties, while landlord insurance covers tenant-occupied rentals.
Accidental landlords need to understand that renting even one room or a portion of their property may require switching from their homeowners policy to landlord coverage or adding an endorsement. The coverage types differ in important ways:
Coverage Factor  | Homeowners Insurance | Landlord Insurance |
|---|---|---|
| Occupancy | Owner-occupied | Tenant-occupied |
| Structure coverage | Covers dwelling and other structures | Covers rental property dwelling and outbuildings |
| Personal property | Covers homeowner’s belongings | Covers landlord’s appliances and furnishings, not tenant belongings |
| Liability | Protects you and your family members if you cause injury or property damage to others | Protects you against tenant and visitor injuries |
| Loss of use (homeowners) / Loss of income (landlord) | Pays for additional living expenses if your home is uninhabitable after a covered loss | Pays for loss of rental income during repairs after a covered loss |
Just as homeowners policies offer riders for additional protection, landlord insurance policies come with optional add-ons and endorsements that expand your coverage.
Landlords should consider these add-ons to fill coverage gaps and protect their rental property against specific risks. Common endorsements include:
Umbrella insurance: Provides additional liability coverage beyond your landlord policy limits. A catastrophic incident that leads to a sizable judgment against you would be covered under an umbrella policy.[4]
Ordinance/law coverage: Pays for upgrades required by current building codes during repairs. After fire damage, local codes might require you to install a sprinkler system that wasn’t previously mandated.
Equipment breakdown: Covers mechanical failures of heating, cooling, and appliances. For example, your rental’s HVAC system could fail and require replacement due to a mechanical breakdown, which wouldn’t be a covered peril.
Extended theft/vandalism coverage: Provides broader protection against property damage from vandalism.
Short-term rental/host coverage: Protects you if you rent through platforms like Airbnb. A guest who damages your property during a weekend stay would trigger this coverage.
Water backup: Covers damage from sewer or drain backups. This add-on would cover a clogged sewer line that floods your rental’s basement.
Unoccupied/vacant endorsements: Maintains coverage during extended vacancy periods. If your property sits empty for one to three months between tenants, you could otherwise be left without coverage.
See the answers to the most common questions about landlord insurance below.
The cost of landlord insurance ranges between $800 and $4,000 per year. Your actual premium depends on factors like property location, coverage limits, deductibles, and claims history. Landlord insurance is generally 25% more expensive than a comparable homeowners policy.
Yes. Landlord insurance is worth it because it protects your investment from property damage, covers liability insurance claims that could cost thousands, and reimburses lost rental income during repairs. Without it, you’d pay for all repairs and legal fees out of pocket.
No. Landlord insurance and home insurance are different. Homeowners insurance covers owner-occupied properties and the owner’s personal belongings. In contrast, landlord insurance covers tenant-occupied rentals and includes loss of rental income coverage that standard homeowners policies don’t provide.
Landlords should consider umbrella insurance if they own multiple properties, have significant assets to protect, or face higher liability risks. Umbrella insurance provides additional liability coverage beyond your landlord policy limits, typically starting at $1 million in additional coverage.
The best landlord insurance company depends on your specific property, location, and coverage needs. Compare quotes from multiple insurers, evaluating their coverage options, customer service ratings, and pricing to determine the best fit for you.
Yes. Landlord insurance includes loss of rental income coverage (also called fair rental value coverage). This coverage reimburses you for rent you can’t collect when your property becomes uninhabitable after a covered loss like fire, storm damage, or vandalism requiring extensive repairs.
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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
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