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If you intend to rent out your home, apartment, or condo, it’s essential to have landlord insurance coverage. But with a multitude of providers and policies to choose from, finding the right one can be daunting.
That’s why we reviewed the 9 best insurance companies for landlords to help make your search easier.
What Is Landlord Insurance?
Landlord insurance is an insurance policy designed to protect those who rent their property to tenants, unlike homeowner’s insurance designed to protect the policyholder’s primary residence. Generally, landlord insurance focuses on three major categories:
- Property damage: Landlord insurance can cover structural damage caused by severe weather conditions, fire, vandalism, and other damages claimable under your policy.
- Liability: Liability protection can help cover legal fees, medical expenses, and other associated expenses if deemed as liable in certain cases. Examples include when a tenant sustains an injury due to negligent maintenance, a break-in due to insufficient security, or if you deny a lease and the applicant tries to sue.
- Loss of income: Loss of income coverage can help you avoid lost revenue when a tenant stops paying rent due to financial reasons, your property is unexpectedly abandoned, or if tenants have to live elsewhere while the property is being repaired.
Other examples of protection that may be worth purchasing are:
- Builder’s risk insurance: If you plan to renovate your rental, builder’s risk insurance can cover your property if it’s damaged or destroyed by fire, wind, vandalism, vehicle collisions, or other accidents.
- Emergency coverage: This coverage can mitigate the costs of services provided by third parties. If there’s an electrical issue at your rental and you can’t get there in time to resolve the issue, you can dispatch a contractor to assist your tenants as quickly as possible.
- Workers’ compensation insurance: Landlords who employ property managers and contractors, or have tenants complete tasks in exchange for reduced rent can have workers’ compensation insurance if someone is injured while carrying out their responsibilities.
- Security deposit insurance: Security deposit insurance helps cover unexpected costs during the lease term, such as property damage and unpaid rental fees. This type of insurance reduces upfront costs for tenants while still giving landlords coverage through an insurer.
What Is the Best Insurance for Landlords?
1. State Farm
Whether you’re renting out a single-family home, a multifamily home, or a duplex, State Farm offers comprehensive landlord insurance policies to protect your property. In addition to the main rental property, your State Farm policy can cover attached structures like fences and swimming pools in case they get damaged. Plus, landlords can expect general liability coverage, loss of income insurance, equipment breakdown protection, and more.
State Farm also makes it easy to customize your insurance policy to your needs, but you’ll have to contact an agent to learn more about coverage limits and pricing.
2. Liberty Mutual
While you may not find the same automatic add-ons with a basic policy from Liberty Mutual, you’ll have plenty of flexibility to customize your coverage. You’ll need to speak with an agent to get a free quote to learn more about pricing and coverage plans.
Liberty Mutual also offers convenient discounts and bundling opportunities for landlords who live in the rental property and those who are claim-free for five years. If your insurance plan with another provider ends soon, Liberty Mutual may present additional discounts to purchase insurance with them when requesting a quote.
3. Steady
Steady provides a selection of financial and insurance products to property managers and owners of single-family rental homes. One of their primary offerings is the Owner Benefit Package
which provides rent default insurance, insights on quarterly reports, market updates, and real-time legislative updates. You can also protect your income for up to two months with Rent Protection and access up to 12 months of rent upfront with Steady’s Rent Advance program.
Avail has partnered with Steady to make it easier to purchase rent guarantee insurance through the platform. If your tenant stops paying rent for any reason, simply file a claim and collect the amount owed based on the terms of the original lease agreement. Landlords can choose coverage for as few as six weeks or as many as six months. With proper planning, you won’t have to worry about your income stream being interrupted during an eviction or while you search for a new tenant.
Owners can contact a Steady representative through their website for more information on pricing or purchase rent guarantee insurance coverage through the Avail platform.
4. Allstate
If you’re a landlord that owns multiple properties, you may consider turning to Allstate for your needs. Allstate offers discounts for bundling a landlord policy with additional coverage such as automotive coverage or homeowner’s insurance, so consider taking advantage of this benefit.
In addition to property protection and liability insurance, you can opt into plans that include premise medical coverage to help cover medical costs and expenses should a tenant be injured on your property. Other available add-ons are vandalism coverage if your rental is vandalized, burglary coverage in the event of a burglary, and rental property under construction coverage if you’re renovating your rental.
5. GEICO
While GEICO is well-known for its auto insurance, they also offer landlord coverage options. GEICO offers affordable coverage that covers property damage, liability, and lost rent scenarios — making it an excellent option for first-time and seasoned landlords. Add-ons are also available, such as coverage for vandalism, but you may want to contact an agent for an accurate breakdown of your policy costs and needs.
6. Travelers
If you’re looking for the best landlord insurance for a property of one to four units, you may want to consider Travelers. Their property coverage policy can protect the main unit, additional buildings like a storage shed or garage, and landlord-owned belongings used to maintain the rental like a lawnmower or tools. Plans also include liability insurance with limits of $100,000 or higher.
A portion of this amount can go towards medical payments if you’re found liable for an injury sustained by a person who doesn’t live on the property. A Travelers policy also includes loss of use coverage, which provides coverage for the fair rental value of the unit if your rental requires repairs due to a covered loss and isn’t fit to live in by tenants.
7. Obie
Obie is a landlord insurance provider available in all 50 states that lets you protect your rental with a customizable policy. Their policies cover property damage caused by severe weather, rent loss, and liability. Obie also offers risk assessment based on geographic location. Users can access a virtual map to visualize the potential for natural disasters like floods, tornadoes, earthquakes, and hurricanes to get the necessary coverage. Furthermore, this coverage is available for various property types, including single-family homes, multifamily properties, duplexes, and condos.
Landlords can even insure entirely vacant rental properties, short-term rentals, or those in the process of being flipped or renovated with Obie. Getting an estimated quote online is easy, and a data-driven approach results in competitive pricing for your custom plan.
8. Farmers
Farmers landlord policies provide standard coverage for property damage caused by extreme weather or a burst pipe that leads to extensive water damage. You’ll also get standard liability coverage, which can kick in if someone is injured on your property and needs medical care. Loss of rent coverage is available as an add-on, as is protection for structures attached to the building like a garage or driveway.
Farmers is also one of the best insurance options for landlords who own multiunit properties or an entire apartment building. You can find a convenient broad-coverage policy by reaching out to a representative for a price quote.
9. USAA
USAA is insurance available to military members and their families only. While access is somewhat exclusive, it can still be a valuable resource for eligible landlords.
USAA home insurance policies for rental properties can cover up to 10 of your tenant-occupied rentals. Policies provide coverage for the building itself, personal liability, and rental income. You can also opt into less common insurances, like home-sharing coverage for landlords who live on site. To help keep costs low, you can bundle a landlord policy with other plans for a 10% discount.
Is Landlord Insurance Different From Renters Insurance?
Renters insurance is intended to protect a tenant’s personal belongings from damage or theft, as well as damage or injury accidentally caused to others. Landlords require tenants to purchase renters insurance before moving in since landlord insurance does not protect the tenants, only the rental property.
If you want to encourage your tenants to purchase renters insurance, Avail has partnered with Lemonade to allow tenants to easily request a quote within the platform after signing a lease. If the property is in a state where Lemonade operates, your tenant can apply for a plan that best suits their coverage needs. Lemonade allows them to file claims, add a spouse or significant other to their policy, and opt into additional coverage from the convenient Lemonade app.
Plans start as low as $5/per month for Lemonade renters insurance, though annual payment plans are available at a discounted rate. Your tenants won’t have to worry about fluctuating fees, and claims are frequently paid out quickly after filing. Furthermore, Lemonade’s Giveback policy donates unused claims funds to a charitable organization of your tenant’s choosing. Options include The Humane Society, the Born This Way Foundation, March For Our Lives, and more.
Manage Your Rental Property With Avail
When finding the best landlord insurance, you’ll want to ensure all your needs are sufficiently met and protect your rental properties. Once you’ve purchased landlord insurance, you can also purchase additional coverage with Steady through the Avail platform and streamline the renting process for your properties.
Create an account or log in to easily manage your rental, collect rent payments, track rental property accounting, manage maintenance requests, and more with Avail.
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Having the wrong insurance policy for your rental property could cost you thousands of dollars. Often, landlords believe a homeowners policy is enough — but it’s not always enough to cover the added liability of renting your home to tenants.
Questions on Rental Property Insurance
What is the best policy for a landlord to have to protect their properties?
As a rental property owner, you should consider policies that provide:
- Coverage for the appropriate dwelling type, such as a single family home, duplex, apartment and other structures on your rental property, like a shed or detached garage
- Coverage for personal property if you rent your dwelling partially furnished (i.e. you provide certain furniture)
- Liability coverage
- Loss of Rent coverage
If you live in an area subject to flooding, you may need a Flood Policy through National Flood Insurance Program (NFIP). And if you live in an area prone to earthquakes, you might consider adding an earthquake endorsement to your policy.
What should we look for in the tenant’s renters insurance policy?
It is up to the tenant to select his or her coverage and carrier. But in general, you will want to confirm they have a renters insurance policy that at a minimum includes liability coverage. Other important coverage includes personal property coverage and additional living expenses (loss of use).
Lemonade offers renters insurance policies starting at $5 a month that cover all of the above, and renters can get a quote in 60 seconds.
I’d like to understand what is covered for pets. My policy won’t cover damage from my tenant’s pet, but I can collect from their policy if their pet damages my property? Do I understand that right?
Your policy will not cover their pet’s damage. But you may be able to pursue a claim against your tenant’s policy. For example, you may be able to pursue a claim if your tenant’s dog chews on your carpet.
Do renters insurance policies usually include Loss of Use or is this a separate rider?
Lemonade renters insurance
If the tenant’s water overflows and drips down to the below neighbor’s ceiling, who is liable?
In these situations, several policies can come into play as well as the Association CC&Rs:
- Your policy for damage to your property and loss of rents
- Their policy for damage to their condo unit
- Liability coverage if they did something that caused them to be responsible
- The condo association master policy may apply
How does a policy determine who is responsible for repair damages? For example, what if a bad contractor did poor repairs that failed and needed more repairs?
Determination of responsibility depends on the facts of the situation, like who hired the contractor, the policy contract, and the contract with the contractor.
If a covered loss damages a tenant’s stuff, is that not covered under liability damages?
Liability coverage is dependent on your being legally responsible for the cause of the damage.
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Landlord insurance can be trickier than most types of insurance — it comes in different forms, has two types of payouts, and includes different types of coverage. That’s why we’ve created this easy guide to explain the landlord insurance lingo, describe the different policies, and simplify the decision-making process. Here’s what you need to know about landlord insurance.
What Is Landlord Insurance?
Landlord insurance is a coverage policy intended to protected landlords that rent out their home, condo, or apartment. If you currently have homeowners insurance, then this will only protect you until you begin renting out your house to tenants.
That’s why it’s advised to purchase landlord insurance right away to ensure you’re always protected when allowing tenants to rent your property.
What Does Landlord Insurance Cover?
Depending on the level of coverage you go with, a landlord insurance policy will usually cover:
- Property damage: Covers any damage caused by severe weather conditions, vandalism, theft, or anything else that could damage the physical structure of the property.
- Liability: Covers lawsuits, bodily injury claims, medical fees, funeral costs, legal fees, settlement costs, and other liability claims you may experience as a landlord.
- Loss of income: In the event a tenant needs to move out due to severe weather conditions, your insurance will help compensate you for lost income. The lost rental income must be due to a loss event, and not something like an eviction, which is not covered.
There may also be additional coverage you can add, all of which will help protect you as a landlord. Examples of this are the following:
- Water and flood coverage covers water damage.
- Tornado coverage for areas that regularly experience tornadoes.
- Property coverage may be necessary if you are renting to tenants who are using your furniture. This can sometimes cover damage done to carpets or other fixed installments in the unit.
How Much Does Landlord Insurance Cost?
The cost to purchase landlord insurance varies depending on where you’re located, the size of the property, the cost to repair damage, and the level of coverage you’re looking for. It’s common to see an average landlord protection policy premium be in the annual $800 to $1,200 range. As a comparison, an average homeowner’s policy may be in the range of $700 to $1,000 annually, depending on size.
Typically, the more comprehensive the coverage is, the more expensive the policy will be. If you include options like the “lost rental income” coverage, then the premium will also be higher.
Do I Need Landlord Insurance?
If you’ve recently become a landlord and have tenants in your rental property, then the answer is yes. Landlord insurance can not only protect your property, but it can help protect you as the landlord in case anything happens during the lease term.
However, if you’re only renting your property a few weeks per year, then your homeowners insurance will usually provide sufficient coverage. Similarly, if you live in the same home or building as your tenant, you can likely upgrade your homeowners insurance so it also covers a “unit rented to others.”
What Type of Landlord Insurance Do You Need?
Landlord insurance comes in many forms and can have two different kinds of payouts. The different kinds of landlord insurance are called dwelling policies, and they fall into three categories:
- DP-1: This is the most basic coverage. It covers relatively common occurrences, like fires and vandalism.
- DP-2: This coverage is slightly broader and covers heftier (and less likely) damage. Mark Carrasquillo, an account executive with insurance broker E.G Bowman in New York describes DP-2 as coverage for “named perils, like damage from a windstorm, hail, fire, or vandalism.” It usually covers “provision for collision.” For instance, it covers damages if a car hits your building.
- DP-3: This is the broadest policy. It is sometimes called “special form” or an “open peril policy.” Basically, every peril is covered under this policy, except for any that are listed as specifically excluded.
For each of these landlord policies, there are two different kinds of payouts. Cash value is a payout that gives you the cash amount for whatever was damaged. The amount is what you would pay for a similar item at today’s prices, minus depreciation. Replacement value, on the other hand, is usually amounted to the replacement cost only, without depreciation. Thus, replacement value usually gives you a higher and more accurately needed amount of cash.
If you have the choice between a cash value payout or a replacement value, it’s advised to go with replacement value as it will typically end up giving you more money to help cover costs of replacing damaged property.
What Is a Liability Insurance Clause and Why Do You Need it?
Liability insurance protects your financial assets in case someone files a suit against you in an effort to compensate for damages. Tenants can sue landlords for damage including financial difficulty, emotional harm, physical injuries, or death. While tenants can file a suit, they are usually only successful if you were actually liable for these damages.
To avoid being liable for damages, here are few tips to consider:
- Make sure the property is in good condition.
- Stay up to date on local landlord-tenant laws discussing building and safety codes.
- Regularly inspect the property for potential hazards or anything that could potentially cause an injury.
- Make sure the property does not contain lead paint, radon, or carbon monoxide.
- Make sure the building remains safe and crime-free by installing extra lighting and keeping exterior doors locked.
- Be sure to fix any maintenance repairs promptly.
- Prepare your property for winter hazards, like ice.
Despite following all of these protocols, it’s still smart to have liability insurance just in case you are found liable.
When Are Landlords Held Liable?
Landlords can be held liable for many different situations. The most common are injuries resulting from slips, property damage from leaky pipes, and damage from break-ins. Landlords are considered responsible for these hazards when they have been negligent.
For instance, a landlord is responsible for damages if they doesn’t properly resolve a maintenance issue or fail to keep the unit safe and in good working order. The best way to avoid being liable is to keep your unit and building as safe as possible, regularly check on its condition, and fix any potentially dangerous problems immediately. And despite your best efforts to keep everything in good condition, it’s still smart to have landlord liability insurance to help cover damages and legal expenses if a suit is carried against you.
Fair Rental Income Clause
Fair rental income protects landlords if their property becomes uninhabitable due to damages. When your unit becomes uninhabitable, you are losing out on income. The fair rental income clause covers this lost income for as long as it takes for your unit to be repaired. Typically this clause only covers income for a period of up to 12 months.
The Cost Difference Between Landlord Insurance vs. Homeowners Insurance
According to the Insurance Information Institute (III), most landlord insurance cost roughly 25% more than a standard homeowners policy because landlords typically need more protection than the average homeowner. The idea behind this is that you are increasing your risk of damage when you rent your unit to tenants.
There are many factors used to determine the price of a landlord policy. The following factors were listed in the Insurance Information Institute (III):
- The square footage of the house and any additional structures, such as a detached garage building costs in the area.
- The features of the home and construction materials used to build it.
- The crime rate in the neighborhood.
- The likelihood of damage from natural disasters, such as hurricanes and hailstorms.
- The home’s proximity to a fire hydrant (or other source of water) and to a fire station; whether the community has a professional or volunteer fire service; and other factors that can affect the time it takes to put out a fire.
Whether you’re new to being a landlord, you’re a DIY landlord, or you’re a highly experienced landlord, we recommend you require renters to have renters insurance. Often, renters blame landlords for stolen items. While it can be the landlord’s fault if they are not keeping the building safe from break-ins, the easiest fix to avoid this problem is to make sure the tenants are insured. Their renter’s insurance will cover things like stolen items.
Manage Your Rental Property With Avail
Landlord insurance is necessary when you are renting out your home for an extended period of time, or you are renting to tenants while you are not in the building. Your risk for liability and damages goes up when you become a landlord, so the cost of insurance will also increase, but so will the amount of coverage you receive.
Once you’ve secured landlord insurance, the next step is managing your rental property with landlord software to easily streamline time-consuming processes. Create an account for free to screen tenants, create rental applications, access lawyer-reviewed lease agreement templates, and more.
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]]>Before we get started, let’s talk quickly about what landlord’s insurance is.
What is Landlord’s Insurance?
Hopefully you’ve realized that having rental properties is a business, even if you have just the one unit. You have rental income and you have expenses. And the fallout from that is your profit (and hopefully not a loss). You can raise rents to increase your income and you can manage expenses to keep costs down. You have a lot of control. Landlord’s insurance, however, is to protect you from certain things you DON’T have control over.
You can have above market rents, the best tenants and be the world’s best operator (keeping your expenses down), but if there’s a fire, flood, explosion or vandalism, your business could be wiped out. And these things are almost entirely out of your control. An insurance policy will normally cover these kinds of unexpected events and gives you the means to control the uncontrollable.
A landlord policy will typically cover the following:
Property Damage – covers damage due to events like fire, vandalism, theft and storms that could occur to the physical structure of the property (the building).
Liability Insurance – covers lawsuits, bodily injury claims, medical fees, funeral costs, legal fees, settlement costs, and other liability claims against you as the landlord for events that occur on your property. If you didn’t shovel and de-ice the sidewalks this winter and a tenant slips, you could be liable for all the medical fees, or worse a settlement against you for negligence. Liability insurance may also cover another person’s property damage in the event you could be liable. If you never got around to fixing a leak that you were aware of and the leak damaged a tenant’s expensive art collection, you could be on the hook.
Loss of Income – when there’s a loss event (such as a fire, flood, etc.) that causes a tenant to move-out and you to subsequently lose rental income, this insurance will help compensate you for lost income. Its important to note that the lost rental income must be due to a loss event, and not something like an eviction, which is not covered.
Optional Coverage – there are several additional options you can add to a standard policy, such as rent guarantee insurance, natural disaster insurance, and coverage on property items such as furnishings or carpet in the rental property.
Do I need landlord’s insurance?
Although a landlord policy is not required by law, it is prudent to have some level of coverage, specifically for the reasons given above. However, many first-time landlords ask if they truly need separate coverage or if their existing homeowner’s policy (or another policy) would cover damages and/or liabilities.
What does an existing homeowner’s policy do for landlords? Well, not much. In most circumstances, your insurance company will deny your claim if it wasn’t clear that you’d be renting to other people. It’s unlikely that you’d be covered for property damage and almost certainly won’t be covered for any type of liability claims, especially those arising from your tenants or his/her guests.
This question comes mostly from landlord’s with short term rentals or those who also live in the property or building. If you’re only renting your property for a couple weeks per year, your current homeowner’s policy may be OK, but if you have more than just an occasional tenant, your existing policy won’t do much. And if you don’t live in the building and/or have a lease agreement in place for 12 months, which is normal, you’ll certainly need something different than a homeowner’s policy.
It’s best to talk with your insurance agent, who can direct you to the right type of coverage. It’s far worse to be paying for something that you thought covers you and actually doesn’t cover you at all. You’d literally be paying for nothing.
Property Damage: What are the options?
Property coverage typically refers to the coverage of physical loss due to sudden, accidental, and direct events. Policies may be under many names (Landlord Insurance, Landlord Protection, Dwelling Protection, etc.), but are generally referred to as dwelling policies. Then there are typically three levels of coverage, abbreviated as: DP1, DP2, DP3. These define how broad your coverage is.
- DP1 (aka “basic property coverage”): basic coverage which includes relatively common events like fire
- DP2 (aka “named peril coverage”): broad coverage, which includes events/perils that are specifically named, like windstorm, hail, fire or vandalism
- DP3 (aka “comprehensive property coverage”): broadest coverage, which is an open policy, or special policy, where unless a peril is specifically excluded, it’s covered
Because of the more encompassing level of protection, most landlords choose a type of coverage similar to DP3, or comprehensive property coverage. However, this does depend on your situation as a landlord. If you’re renting out a single unit condo that you bought, initially to live in yourself, you may not need that broad of protection since the condo association should have a policy to cover most of the building related events. In that situation, you’re better with a basic coverage, and one that includes some liability protection (see below).
Payout Terms: Cash Value vs Replacement Value
Each of these different coverage levels may also have different kinds of physical payouts. For example, with a DP1 coverage, it may be common to see claims paid in terms of cash value. That means you’d receive the current value (post depreciation value – taking into account age and remaining life of the property that was damaged).
However, you should consider a policy that provides payouts in terms of replacement value. That means you’d receive the amount that it would take to replace or repair damages in today’s actual dollars. This is favorable because you’re typically not able to buy used materials or depreciated labor (obviously this doesn’t exist) when repairing damages. And unless you otherwise plan to supplement your claim personally, replacement value is preferable.
It’s understandable that if you were only doing a cursory review of your coverage and payout options, you may see something about being paid for the”cash value” and instinctively think, “yes, I want to be paid in cash” vs paid the “replacement value” and think “no, I want the cash, not a replacement”. However, your initial thoughts would be wrong. You’d be paid in cash in both situations, just different amounts. But now you know.
Liability Insurance: What are the Options?
Liability insurance, as mentioned previously, covers situations when a tenant or visitor is injured due to the landlord’s negligence, a maintenance issue, or failure on the part of the landlord to keep the property safe and in working order. Typically, a tenant or visitor injures themselves on the property and believes the landlord is responsible for this.
The coverage is to protect you from financial loss in the situations where a tenant or visitor brings up a lawsuit seeking reimbursement for medical bills, legal fees and possible even distress. Typical events that may trigger this are slips, falls, animal bites, and even when a tenant is victim of a crime (usually because of failure to maintain proper lighting, security, etc.).
The options typically include listing what liability you may want covered. For instance, if there’s a swimming pool onsite, you may want coverage specifically for accidents that could occur around that. Most experts recommend having $1 million in liability coverage per rental as a sufficient coverage. However, this does depend on the specifics of your rental.
Other Options?
There are several other options that you can add on to your coverage. We’ve included the two most commons ones below:
Landlord Protective Coverage. May include equipment breakdowns (such as boilers and furnaces). These aren’t typically covered by the protection policies mentioned above as they’re not considered sudden, accidental or direct events.
Lost Rental Income. When you have a covered loss (a loss of property that is previously covered by your policy), you may also suffer from lost rental income, particularly when a tenant has to vacate the property while its under repair. If you elect to add this option, you’d be compensated for lost rental income as well. Vacancies due to evictions or turnover are not considered a covered loss and therefore lost rental income in those cases would not be covered.
What does it cost?
When people are thinking about the cost of the policy, they’re typically thinking about the “premiums”. This is the monthly or annual cost of the policy. It’s common to see an average landlord protection policy premium be in the annual $800 – $1200 range. As a comparison, an average homeowner’s policy may be in the range of $700 – $1000 annually, depending on size.
There are a bunch of factors that affect the pricing, but the majority of those factors are related to the rental itself and aren’t really a lever for you to adjust the cost with (assuming you want to properly cover the property).
There are three factors, which ARE in your control that affect the pricing: the type of coverage, the deductible and coverage limits.
The Type of Coverage
This refers to the types of physical coverage mentioned above as well as what options you add on. Typically, the more broad your coverage (comprehensive coverage), the more expensive the policy will be. If you include options like the “lost rental income” coverage, then the premium will also be up. If you’re choosing a “named perils policy” (DP2), then the more named perils you add, the higher the annual premium will be. The other factor included here is whether you are being reimbursed for “cash value” or for “replacement value”.
The Deductible
The deductible is the amount that you, as the landlord, must pay before the insurance carrier then picks up and starts paying towards the claims. The higher the deductible you set, the lower the monthly/annual premiums will be. Simple as that.
The COVERAGE Limits
There are going to be upper bounds to the coverage, where amounts greater than the upper bounds are no longer covered. For instance, if you have $1 million in liability coverage, but get sued (and a judgement against you) for $1.5 million, you’re covered for only the $1 million (minus the deductible). The rest would have to come out of pocket.
The other factors that affect pricing (again mostly related to the property itself):
- The geographic location of the property, and if there are known risks in the area
- The size of the structure and its age/condition
- Whether your electrical wiring is up to current code
- How many rental units you have
- Whether you allow smokers to rent from you
- Whether your complex has a swimming pool
- Whether you have fire sprinklers installed in your rental units
- Whether the complex has gated access
- Whether you have burglar alarms
What About Renter’s Insurance?
Tenants should get their own renter’s insurance policies. The policies we’ve described here do not cover the renter’s personal belongings. Renter’s insurance, just like landlord’s insurance is not required by law. And surprisingly studies have shown that nearly half of renters don’t get their own insurance. Unfortunately for landlords, tenants have the mindset that all landlords are rich and have the wrongful impression that they can make claims against the landlord if their personal property is damaged. That’s why its in your best interest to require your tenants to purchase their own renter’s insurance policy.
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