What does landlord insurance cover?
Last updated: June 2023
Landlord insurance is a policy for someone who rents out a home they own. This type of insurance typically includes two different types of coverage: property and liability protection. Both coverages are intended to help protect you, the landlord, from financial losses.
Landlord property protection
The property protection in a landlord insurance policy typically helps cover physical property related to the home you're renting out. This may include the dwelling itself and equipment you keep on site to help maintain it. Coverage generally includes:
This coverage helps pay to repair your rented home, condo or apartment if it's damaged by fire, lightning, wind, hail or other covered losses.
- Other structures
This part of your policy helps pay to repair detached structures on your rental property, such as detached garage or fence, if they're damaged by a covered loss.
- Personal property used to service the rental
If you leave a lawnmower or snow blower onsite to maintain your rental property, landlord insurance may help cover this equipment if it's damaged. However, if you leave your personal bike or DVD player at the home you rent out, it likely won't be covered under your landlord policy.
All the above types of coverage are subject to the deductibles and limits stated in your specific landlord policy. Your deductible is the amount you'll pay for a covered loss before your landlord insurance kicks in. A limit is the maximum amount your policy will pay after a covered loss. Each coverage typically has its own, separate deductible and limit. You may be able to set your own deductible and limit amounts for these coverages.
Landlord liability protection
The liability portion of a landlord insurance policy may help you pay for another person's medical bills or your legal expenses if someone else is injured on your rental property and you're found responsible.
For example, if your tenant falls downstairs at your rental property and a court determines that you failed to maintain the stairs and/or railing, you could be held responsible for your tenant's medical, legal and other costs. In that case, your landlord liability coverage may help pay for those expenses, up to your policy's limits. You typically won't pay a deductible for a liability claim.
Extra landlord coverages to consider
Depending on the neighborhood, geographic area or condition of your rental, you may want to consider adding on some optional coverages to your landlord policy. These coverages may include:
You may want optional coverage to help you pay to repair vandalism damage. If your property is vandalized, that type of damage typically isn't covered by a traditional landlord policy unless you purchase vandalism coverage. This optional endorsement adds coverage for vandalism to the dwelling, other structures, and contents protection. Any vandalism that occurs after the property has been vacant or unoccupied for 90 or more days is excluded.
A standard landlord insurance policy may help pay to repair the exterior and interior window or door to your home if it's damaged in a break-in if the dwelling is not vacant or unoccupied for 90 days. An optional burglary endorsement adds coverage for all damage caused by burglars illegally entering the building as well as damage to personal property. This optional endorsement adds the named peril of burglary for damage to personal property caused by the burglars illegally entering the building.
- Rental property under construction
Are you gutting or renovating your rental or building a new dwelling? You may be able to purchase additional coverage to help protect the structure until it's ready to be occupied.
- Building codes
If you're repairing or replacing part of your rental after it's been damaged, you could be legally required to upgrade items like wiring or ventilation, says the International Risk Management Institute. This is because city or county codes may have changed since your property was originally built. This coverage may help reimburse you for those additional costs.
Talk with your insurance provider to learn what optional coverages may be available and for help understanding how they may help protect you as a landlord.
What's usually not covered by landlord insurance?
While landlord insurance may help pay for expenses stemming from a few sudden and accidental losses, you'll likely find that some things are excluded from the policy's coverage. A landlord policy may not cover:
- Maintenance and equipment breakdowns
If the furnace or dishwasher in your rental property breaks down, you'll likely have to pay out of pocket for any necessary repairs or replacements.
- Property you share
If you live on the property and rent out a room or another floor to a tenant, you're typically not eligible for a landlord policy, according to the National Association of Insurance Commissioners. Landlord policies are designed for "non-owner-occupied" property. Talk to your insurer about whether you can add coverage to your homeowners policy for the section of your property you're renting.
- Tenants' belongings
Landlord insurance generally does not cover your tenant's personal possessions (electronics, clothes, etc.). For that protection, your tenants will need to purchase their own renters insurance policy. Some landlords require tenants to show proof of renters insurance before approving their rental contract. This helps renters pay to repair or replace their personal belongings, such as furniture and clothing, if they are damaged by a covered peril, such as fire or theft.
Ready to rent out a property you own to tenants? A insurance provider can explain what options are available so you can choose the coverages that are right for you.