What Does Landlord Insurance Cover?

Landlord insurance provides coverage when you lease out your primary home, vacation house, or investment property to long-term renters.

Sarah Sharkey
Written bySarah Sharkey
Sarah Sharkey
Sarah SharkeyInsurance Writer
  • 7+ years writing insurance and personal finance content

  • Contributor to top media, including USA Today

A passionate personal finance advocate, Sarah’s writing has graced the pages of many of the personal finance and insurance industries’ top web publications.

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Sarah Archambault
Sarah Archambault
  • Experienced personal finance writer

  • Background working with banks and insurance companies

Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.

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Updated July 10, 2024

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Landlord insurance, sometimes called a rental dwelling policy, provides protection when you lease out certain types of properties long-term, like your primary residence, second home, or investment property. It doesn’t cover short-term rentals or renting a room inside your home.

Landlord insurance helps you pay for repairs and liability claims after covered events, like a storm or injury. It also covers your belongings on the property, like a lawn mower or snowblower. In some cases, this type of policy also covers loss of rental income as a result of covered events. But landlord insurance doesn’t protect your tenant’s belongings.

When you own a rental property, the right type of insurance policy can help protect your investment and your wallet. Here’s what you should know about comparing home insurance quotes and finding a landlord insurance policy.

Quick Facts
  • Standard homeowners insurance doesn’t cover long-term rentals, but it may allow for certain types of short-term rentals.

  • Landlords typically require tenants to carry their own renters insurance.

  • Renting your primary residence to guests, like an Airbnb, usually requires business insurance, like a hotel or bed and breakfast policy.

What landlord insurance covers

A rental dwelling policy, or landlord insurance, offers financial protection for long-term rental properties, including your primary residence, second home, or investment property. If a natural disaster, fire, or other covered peril damages the property, your insurer will help you pay for the repairs. Additionally, landlord insurance covers liability claims if someone is hurt on the property.[1]

You can’t use standard homeowners insurance for long-term rentals. But if you’re only planning to rent your property for a short time, you may be able to get an endorsement, or rider, from your insurer. Homeowners insurance and landlord insurance don’t cover regular short-term rentals, like Airbnb. You’ll need a business policy instead, like a hotel or bed and breakfast policy.

Take a closer look at the key components of a landlord insurance policy below.

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Landlord property protection

Property protection covers the home itself. Your coverage also typically protects other structures on the property and some of your personal property. For example, a landlord insurance policy generally protects a shed on the property and your contents inside, like a lawnmower used to maintain the property.

Some commonly covered perils include:

  • Fire

  • Vandalism

  • Natural disasters

  • Riots

  • Storms

  • Hail

Your insurer can help you pay for damage if a covered disaster causes damage to the property.

Learn More: What Are Perils in Insurance?

Learn More: What Are Perils in Insurance?

Landlord liability protection

Liability protection helps pay to defend you in lawsuits or pay someone else’s medical costs if they’re injured on your property. It may also help cover legal costs.

For example, if a tenant or their guest falls down and gets hurt, you could be liable. But your landlord insurance policy may help cover the cost of legal fees — and potentially your tenant’s medical bills.

Landlord insurance can help provide peace of mind that your finances are protected in the event you need to cover:

  • Medical expenses after a tenant (or a tenant’s guest) slips on the property

  • Legal costs if a tenant sues you for their injury

Does landlord insurance cover tenant damage?

Landlord insurance may cover some instances of accidental or unintentional tenant damage. But it won’t typically cover damage that a tenant inflicted intentionally.

Accidental damage includes anything the tenant does by accident, like:

  • Starting a kitchen fire

  • Flooding the tub

  • Breaking a window

Landlord insurance also doesn’t usually cover tenant damage that results from intentional acts of vandalism, activities prohibited in the lease, and normal wear and tear, such as:

  • Starting a fire by smoking, burning candles, or any other cause prohibited in the lease

  • Vandalizing the home with spray paint, holes in walls or doors, etc.

  • Scraping floors, scratching walls, or damaging fixtures due to everyday use

Good to Know

Most landlords require tenants to make a security deposit to help pay for repairs and other expenses that landlord insurance doesn’t cover. You can return the deposit if the tenant moves out without leaving any damage.

What landlord insurance doesn’t cover

Landlord insurance won’t cover every potential issue property owners face. Your policy typically won’t cover the tenant’s personal property, shared property, and maintenance costs.

For example, if the washing machine in your rental house accidentally catches fire, the cost to repair or replace it may be covered. But if the machine broke due to wear and tear or lack of maintenance, you may have to pay to fix it out of pocket or buy a new washer.

Here are some common landlord insurance exclusions:

  • Routine maintenance

  • Appliances

  • Wear and tear

  • Tenant’s personal items

  • Intentional tenant damage

Read the fine print on your landlord insurance policy to better understand what your policy covers. Contact your insurance company or agent if an incident occurs to determine whether filing a claim is an appropriate course of action.

Landlord insurance vs. homeowners insurance

The differences between landlord insurance and homeowners insurance are significant. And landlord insurance tends to be more expensive than a standard home insurance policy.

To purchase homeowners insurance, you’ll likely need to live in the home some or all of the time. Landlord insurance doesn’t require you to live on-site and allows for long-term rentals.

Homeowners insurance protects your property, as well as other structures and personal belongings, from covered perils. Landlord insurance also protects the property from peril, but it only covers possessions that belong to you, not the tenant.

Homeowners insurance provides liability coverage against accidents that happen both on and off the property. In contrast, landlord insurance only covers incidents that happen on the insured property.[2]

The table below breaks down the differences between homeowners insurance and landlord insurance.

Factor
Landlord Insurance
Homeowners Insurance
CostHigherLower
OccupiedLeased to long-term tenantHomeowner (as a primary residence) or short-term renter in some cases
Liability insuranceProvides coverage for injuries that happen on the propertyProvides coverage for injuries that happen on the property and sometimes injuries that occur away from the home
ContentsDoesn’t cover tenant belongings but may cover personal property belonging to homeownerCovers homeowner belongings

How much is landlord insurance?

The average cost of landlord insurance varies from state to state. The location of your property and associated risk factors, like natural disasters and crime, affect landlord insurance rates. 

In general, rental property insurance is more expensive than homeowners insurance due to higher liability coverage limits, protection against some rental income losses, and property damage protection.

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How to buy landlord insurance

To buy a landlord insurance policy, follow these steps:

  • illustration card https://a.storyblok.com/f/162273/150x150/e6c9ee6008/recovery-and-repair-96x96-blue_023-repair.svg

    Decide on the coverage you need

    Determine how much coverage you want for the property. It’s especially important to nail down how much liability insurance coverage you need. Some landlords opt for additional coverage to protect themselves with higher policy limits.

  • illustration card https://a.storyblok.com/f/162273/x/fa11c1fe75/comparison-website.svg

    Shop around

    Compare quotes across multiple insurance companies to find the best option for your situation.

  • illustration card https://a.storyblok.com/f/162273/150x150/133faf506f/law-and-justice-96x96-green_010-agreement.svg

    Read the fine print

    Take the time to read the details of the specific insurance policy to confirm it covers everything you have in mind.

  • illustration card https://a.storyblok.com/f/162273/150x150/95fa30ac35/insurify-icons-auto-orange-96x96_005-insurance.svg

    Finalize your coverage

    Once you find an insurance company to move forward with, you’ll need to provide additional details about your property and pay the premium before your policy goes into effect.

Landlord insurance FAQs

Here’s a closer look at some commonly asked questions about landlord insurance.

  • Does landlord insurance cover loss of rental income?

    Some insurance companies will cover the loss of rental income after a property suffers a covered loss. For example, if damage from a fire prevents a tenant from living in the property, your insurer might cover the loss of income. But if the tenant is having financial issues, that type of lost rental income generally isn’t covered.

  • Does landlord insurance cover the cost of evicting a tenant?

    In general, insurers don’t cover the cost of evicting a tenant. Instead, this cost falls to the landlord as a part of doing business.

  • Do you need landlord insurance?

    Landlords with long-term tenants renting out their primary, secondary, or income property need landlord insurance. But if you only rent a portion of your home or rarely rent out the house, then a homeowners insurance policy might be sufficient.

  • Does landlord insurance cover tenants’ belongings?

    No. Landlord insurance doesn’t cover your tenants’ belongings. Encourage tenants to purchase a separate renters insurance policy to avoid disputes over damaged tenant property.

Sources

  1. Insurance Information Institute. "Coverage for renting out your home."
  2. Insurance Information Institute. "Homeowners Insurance Basics."
Sarah Sharkey
Sarah SharkeyInsurance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make savvy financial decisions. She covered insurance and personal finance topics. You can find her work on Business Insider, Money Under 30, Rocket Mortgage, Bankrate, and more. Connect with her on LinkedIn.

Sarah Archambault
Sarah Archambault
  • Experienced personal finance writer

  • Background working with banks and insurance companies

Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.

Featured in

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