What Insurance Do You Need As a Landlord?

landlord shaking hands with tenant over landlord insurance

What Insurance Do You Need As a Landlord?

While the economy overall is in an upswing, when it comes to the renters and landlords of America, more homes are rented than owned.

The real estate economy still needs a boost since the housing bubble burst 10 years ago. But that’s good news for the country’s landlords.  The number of American households renting their homes growing from 31% in 2006 to 36% in 2016. With some of those millions of renters coming to your properties, discover everything you need to know to protect yourself with landlord insurance.

(Interested in the first steps to becoming a landlord? Click here.)


What is Landlord Insurance?

There is no specific insurance policy termed “landlord insurance.” Instead, this term is used to refer to the network of insurance coverage you need if you are renting out a home, attachment, or unit.

Though it might cost you a premium every month, it’s still worth it to protect against various legal and financial troubles, including an accident on your property, a criminal problem with a tenant, or a natural problem with one of your housing units.

There are a number of different kinds of landlord insurance. The kind and amount you want will all depend on what kind of unit you are renting.

If you are one of the millions of Americans renting a room in your home or an attachment to your home, you can get landlord insurance as a rider on your existing homeowners’ policy. If you are renting a house or an apartment in a building that you own but do not live in, you will need a separate network of policies.

If your rental unit or units exist in an area with a homeowner’s association, you should also research ways to get residents to follow rules of your homeowner’s association.


Happy homeowner and landlord signing a contract for landlord insurance

What Does Landlord Insurance Cover?

There are landlord insurance policies available for almost any legal or financial problem you might face. Landlord insurance covers property damage, liability insurance, loss of income, and some optional coverages you may consider.

A simple policy covers basic damages beyond what a security deposit would cover. You can then use the security deposit as your deductible in the event of said emergency. This way, you aren’t out of pocket beyond your premium costs.

Property Damage Coverage

Property damage coverage is the bare minimum of insurance coverage you need as a landlord.

Homeowners insurance provides protection to your house in the event of fire, hail, or hurricane damage; your rental property is just as vulnerable to these risks.

Property coverage protects the dwelling itself, detached structures (such as sheds and fences), and any personal items you might use to maintain the address (such as a lawnmower).

Liability Coverage

Liability coverage pays for medical care and/or legal fees in the event that someone is injured on the property and accuses you of negligence.

For example, let’s say your tenant (or a visitor) falls off the back deck and claims that the railing was faulty. If a judge agrees with them, liability insurance would cover their medical bills as well as your legal fees.

Loss of Income Coverage

You likely purchased a rental property as a source of passive income. But what happens if that income stops?

Loss of income coverage steps in when you are unable to rent out a unit due to a natural disaster or fire. So if the next big hurricane takes your rental home off the market for a while, you’ll still be able to pay the mortgage.

Other Kinds of Insurance

There are other kinds of insurance in the optional coverage range. Depending on your insurance carrier and your level of risk, you may want to consider the following types of additional coverage:

burglar breaking lock with crowbar

  • Flood insurance (a must in Florida!)
  • Vandalism
  • Burglary
  • Loss of income due to renovations
  • Rent guarantee insurance

At the end of the day, landlord insurance isn’t for those “just in case” scenarios; it’s an investment in the future.


Invest in Your Future

Landlord insurance is the best way to protect yourself and your home in the event of legal or financial problems caused by tenants and renters. There are currently 48.5 million rental units in America.

Approximately 43 million are currently rented.

Florida, in particular, is a captivating state for renters and landlords alike.  There are a number of reasons for that, including year-round warm climates, low property taxes, and landlord insurance. Add to this an easygoing way of life with no state income tax.

Good renters and good landlords alike are in high demand. Take the worries out of landlord life with landlord insurance, and a good property management company to take care of the rest. Learn why you need a good property management company in Florida to accompany the landlord insurance that will buy you permanent peace of mind.


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