Landlord Insurance for Rental Properties
Protect your rental income and property with comprehensive landlord insurance coverage. Learn about dwelling, liability, and loss-of-rent protection.
Market Value
$25.8B
Average Annual Cost
$2,100-$4,000
Market Projection 2033
$41.6B
What is Landlord Insurance?
Landlord insurance is a specialized property insurance policy designed specifically for rental properties. It protects the property owner against the unique risks associated with renting property to tenants, including liability claims, loss of rental income, and physical damage to the building.
Unlike homeowners insurance (which assumes owner occupancy), landlord insurance acknowledges the increased liability exposure from having tenants and their guests on the property. It also includes protection for your most valuable asset as a landlord: your monthly rental income.
The rental property market has grown to $25.8 billion, with continued expansion projected to reach $41.6 billion by 2033, reflecting the importance of proper landlord insurance in protecting this valuable asset class.
Types of Landlord Insurance Policies
Landlord policies are typically categorized by the type of coverage form:
DP-1 (Basic Form)
Covers fire, lightning, windstorm, hail, explosion, riots, and a few other named perils. This is the most basic landlord policy and is generally the least expensive.
Best for: Investors with basic coverage needs or very tight budgets. Less common due to limited coverage.
DP-2 (Broad Form)
Expands on DP-1 to include damage from falling objects, weight of snow/ice, water damage (from certain sources), and several other perils. This is a popular middle-ground option.
Best for: Most landlords seeking reasonable protection at moderate cost. Covers many common loss causes.
DP-3 (Special Form)
Provides open-perils coverage on the building itself (coverage for all losses except those specifically excluded), plus named-perils coverage on contents. This is the most comprehensive option.
Best for: Landlords wanting maximum protection. Slightly more expensive but covers virtually all accidental losses.
What's Covered in Landlord Insurance
Coverage Breakdown
Dwelling Coverage
Covers the structure itself—walls, roof, flooring, built-in appliances, and permanent fixtures. Typically covers up to the replacement cost of the building.
Other Structures Coverage
Covers detached buildings like garages, sheds, and fences—typically at 10% of your dwelling coverage (often optional).
Liability Coverage
Protects against claims if someone is injured on your property or you damage their property. Typical limits: $100,000-$300,000 (often expandable to $1M+).
Loss of Rent (Additional Living Expenses)
Reimburses lost rental income if a covered loss makes the property uninhabitable. Typically covers 12 months of rent or a percentage of your dwelling coverage.
Medical Payments Coverage
Covers medical expenses for injuries on your property (without fault), typically up to $1,000-$5,000 per person.
Landlord's Furnishings (Optional)
Covers your personal property in the rental unit (if you furnish it), such as appliances, furniture, or equipment you provide.
What's NOT Covered
- ✗Tenant's personal property - Their belongings are their responsibility (they should have renter's insurance)
- ✗Maintenance and wear & tear - Normal deterioration and upkeep are landlord responsibilities
- ✗Intentional damage - Loss caused deliberately by you
- ✗Damage during vacancy - Most policies exclude losses during extended vacancies (varies by insurer, typically 30-60 days)
- ✗Flood damage - Requires separate flood insurance policy (NFIP or private)
- ✗Earthquakes - Requires separate earthquake insurance
Landlord Insurance Costs
The average landlord insurance cost is $2,100-$4,000 annually, though this varies significantly based on multiple factors. This is typically 15-25% more expensive than homeowners insurance for the same property.
Factors Affecting Your Premium
- •Location - Urban properties cost more; disaster-prone areas have higher premiums
- •Property age and condition - Older homes and those in poor condition cost more
- •Number of units - Single-family rentals often have lower rates than multi-unit buildings
- •Coverage limits - Higher coverage amounts increase premiums
- •Deductible amount - Higher deductibles mean lower premiums
- •Claims history - Previous claims increase your premium
- •Credit score - Better credit typically means better rates
Premium Examples by Property Type
| Property Type | Building Value | Annual Premium |
|---|---|---|
| Single-Family Home | $300,000 | $1,500-$2,500 |
| Duplex (2 units) | $500,000 | $2,500-$3,500 |
| Triplex (3 units) | $600,000 | $3,000-$4,000 |
| 4-Plex | $800,000 | $3,500-$4,500 |