What is Landlord Insurance?

Before diving into finding the best landlord insurance, it’s important to first understand what landlord insurance is and why it’s important to have a landlord policy. Essentially, landlord insurance can provide coverage specifically for rental properties to help protect against financial loss. Landlord insurance typically provides:

Property Protection

Helps cover the physical property of your rental investment

Liability Protection

Helps cover medical and legal expenses resulting from accidents on your property.

Loss of Rental Income Coverage

Provides temporary rental reimbursement should your property become inhabitable.

How Much Does Landlord Insurance Cost?

As a general rule, you can expect to pay about 15% to 25% more for landlord insurance than a standard homeowners insurance policy. Depending on the state, landlord insurance typically ranges from $800 to $3,000 per year. Some factors that can result in higher premium costs include:

Size

Larger homes often require more resources to repair or rebuild following a loss.

Value

A property with high market value will likely cost more to insure since it costs more to repair and replace.

Age and Materials of Home Construction

Older and poorly maintained properties are typically more complex to repair since necessary parts might be hard to find. Older homes might also require more repairs to be brought up to current code.

Tenancy

Short-term monthly leases might attract tenants that are less concerned about the property’s upkeep and more likely to cause damage than long-term tenants.

Crime Risk

A property located in an area known for frequent incidents of burglary, arson, and other crimes presents an increased risk of claims for insurers.

Environmental Risk

Properties located in areas that are prone to natural disasters like wildfires and hurricanes experience more frequent and significant damages.

Coverage Maximums

Landlord insurance policies usually have a set maximum amount of coverage per event or per year. While choosing a higher maximum may provide greater coverage, it will come at a higher price point.

Add-on Coverage

Insurance add-ons, such as guaranteed income, flood, and emergency coverage, can drive up the overall cost of your landlord insurance.

The Basic Types of Landlord Insurance

In the United States, most landlords can choose from three dwelling policy insurance options to insure their rental properties.

DP1

A DP1, or basic form, policy is the most basic form of coverage available for rental properties in the United States. The most common reason landlords might choose DP1 insurance is because it’s comparatively the least expensive type of policy. Insurance carriers will sometimes provide coverage for vacant homes through a DP1 policy.

A DP1 policy is a named perils insurance policy, meaning that any peril that is insured will be specifically listed within the policy. Common named perils include:

Fire

Lightning

Smoke

Explosions

Windstorm and hailstorm

Vehicle Impact

Aircraft Impact

Riots or civil commotion

Volcanic explosions

DP2

DP2, often called broad form, is a middle-of–the-road landlord insurance policy. This type of coverage is similar to DP1 in that it is also a named peril policy, but DP2 provides coverage for several risks in addition to those outlined in a DP1 policy.

For example, DP2 often covers burglary, malicious mischief, freezing pipes, and falling objects in addition to the covered perils offered to DP1 policyholders.

DP3

Once you’ve decided on the type of dwelling policy and peril coverage you need, the next thing to look at is any applicable add-ons to your policy. These can help cover the following aspects of your property:

More Types of Coverage:

DP3, often called special form, is the most comprehensive, open peril policy, and is generally regarded as the best protection from loss for landlords. Rather than listing covered perils, DP3 insurance specifically names exclusions. Common exclusions include losses due to earthquakes, flood damage, neglect, war, and intentional action.

What Isn’t Covered by Landlord Insurance

Regardless of how much protection your policy offers, there are typically still exclusions from even the most comprehensive landlord insurance policies. Some common property and losses a landlord policy might not cover include:

Maintenance and Equipment Breakdowns

Repairs or replacements of appliances will likely need to be paid for out of pocket—although there may be some exceptions—or covered by a home warranty policy.

Shared Property

Landlord insurance policies are usually designed for non-owner-occupied properties. So, if you live on the property and rent out a room or another floor to a tenant, your policy may have restrictions.

Tenants' Belongings

Your landlord insurance policy most likely won’t provide protection for your tenants’ personal possessions. As such, tenants should be encouraged to purchase their own renters insurance policy.

What to Look for in a Landlord Insurance Provider

Competitive pricing, strong financial ratings, and easy-to-reach customer service agents can all contribute to your decision to move forward with a provider. When it comes to finding the best landlord insurance provider for your real estate investment needs, there are several factors to consider, including:

Are they knowledgeable? The right landlord insurance provider should have specific knowledge of and specialize in the needs of landlords and real estate investors. This knowledge can help ensure coverages aren’t overlooked while drafting your policy and that you have the proper protection in place for your rental property.
What type of coverage is available in your area? What are the risks in your area? Will you need flood protection? Is your property at risk of wildfire damage? The right landlord insurance provider should know what type of coverage is available and important to have in your area.
What type of coverage is available for your rental type? Your coverage may vary depending on the type of property you rent out. For example, a single-family rental home will require different coverage than an apartment complex with 100 units. In addition, if you, the landlord, live on the premises along with a tenant or tenants, it could impact policy eligibility and coverage.
Is there a simple sign-up process? Complicated, drawn-out processes for obtaining coverage can be a time-consuming hassle. The right provider will likely have a simple sign-up process in place to provide you with quick and easy coverage.
Do they provide great customer service? Accessible, hassle-free customer service can help you feel supported and empowered. Some factors that can ease the burden of doing business include:
- Ability to pay bills online
- Ability to report claims online
- Access to industry-expert customer service

Frequently Asked Questions

The following are frequently asked questions regarding landlord insurance:

What Is The Difference Between Landlord Insurance and Homeowners Insurance?

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Landlord insurance is specifically designed to provide coverage for property investors with rental units. Homeowners insurance provides property coverage for private residencies where the policyholder resides on the property. In addition, homeowners insurance doesn’t provide landlords with property protection, liability protection and loss of rental income coverage.

Is Landlord Insurance More Expensive Than Homeowners Insurance?

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In general, landlord insurance costs more than homeowners insurance due to the increased risks associated with tenant-occupied properties. While homeowners are only responsible for their home and its content, landlords are responsible for their property and any damage sustained while renting to guests or tenants.

Is Landlord Insurance Required By Law?

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Landlord insurance isn’t required by law. However, most lenders do require landlord insurance before closing. As such, property owners should strongly consider purchasing a policy to protect themselves against financial and legal risks.

How Much Landlord Insurance Do I Need?

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The specific amount of landlord insurance coverage needed varies from property to property. However, there are a few factors to consider when deciding how much insurance you need, such as how much it would cost to replace the rental structure following a loss.

How Can I Get Landlord Insurance for Multiple Properties?

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In general, most insurers have multi-property coverage available for real estate investors with more than four properties.

Do I Need Public Liability Insurance as a Landlord?

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As a landlord, public liability insurance can protect you from lawsuits brought forth by tenants, their guests, trade or service providers, and intruders who might be injured while trespassing on your property.

Should I Purchase an Umbrella Insurance Policy?

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An umbrella insurance policy can provide additional liability coverage for unexpected expenses. This type of policy can be especially beneficial as a landlord because it can cover costs and protect your assets if you are sued by a third party and found at fault.

Finding the Best Landlord Insurance Provider

If you’re ready to find the best landlord insurance provider for your rental property, Obie can help! Obie’s easy-to-use tools and customizable coverage can offer you an efficient and hassle-free solution.Fill out a quote request today and discover the best policy for your property.

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How to Find the Best Landlord Insurance Provider your investment

What is Landlord Insurance?

Property Protection

Liability Protection

Loss of Rental Income Coverage

How Much Does Landlord Insurance Cost?

As a general rule, you can expect to pay about 15% to 25% more for landlord insurance than a standard homeowners insurance policy. Depending on the state, landlord insurance typically ranges from $800 to $3,000 per year. Some factors that can result in higher premium costs include:

Size

Value

Age and Materials of Home Construction

Tenancy

Crime Risk

Environmental Risk

Coverage Maximums

Add-on Coverage

The Basic Types of Landlord Insurance

In the United States, most landlords can choose from three dwelling policy insurance options to insure their rental properties.

DP1

A DP1 policy is a named perils insurance policy, meaning that any peril that is insured will be specifically listed within the policy. Common named perils include:

Fire

Lightning

Smoke

Explosions

Windstorm and hailstorm

Vehicle Impact

Aircraft Impact

Riots or civil commotion

Volcanic explosions

DP2

DP2, often called broad form, is a middle-of–the-road landlord insurance policy. This type of coverage is similar to DP1 in that it is also a named peril policy, but DP2 provides coverage for several risks in addition to those outlined in a DP1 policy.

For example, DP2 often covers burglary, malicious mischief, freezing pipes, and falling objects in addition to the covered perils offered to DP1 policyholders.

DP3

Once you’ve decided on the type of dwelling policy and peril coverage you need, the next thing to look at is any applicable add-ons to your policy. These can help cover the following aspects of your property:

More Types of Coverage:

What Isn’t Covered by Landlord Insurance

Regardless of how much protection your policy offers, there are typically still exclusions from even the most comprehensive landlord insurance policies. Some common property and losses a landlord policy might not cover include:

Maintenance and Equipment Breakdowns

Shared Property

Tenants' Belongings

What to Look for in a Landlord Insurance Provider

Frequently Asked Questions

The following are frequently asked questions regarding landlord insurance:

What Is The Difference Between Landlord Insurance and Homeowners Insurance?

Is Landlord Insurance More Expensive Than Homeowners Insurance?

Is Landlord Insurance Required By Law?

How Much Landlord Insurance Do I Need?

How Can I Get Landlord Insurance for Multiple Properties?

Do I Need Public Liability Insurance as a Landlord?

Should I Purchase an Umbrella Insurance Policy?

Finding the Best Landlord Insurance Provider

If you’re ready to find the best landlord insurance provider for your rental property, Obie can help! Obie’s easy-to-use tools and customizable coverage can offer you an efficient and hassle-free solution.Fill out a quote request today and discover the best policy for your property.

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