Landlord Insurance: What You Need and What It Costs
A complete guide to rental property insurance for independent landlords — what coverage you need, what homeowner's insurance doesn't cover, and how to find the right policy.
By Marlo · June 14, 2026 · 8 min read
Your homeowner's insurance policy does not cover your rental property. This surprises many first-time landlords — and some discover it at the worst possible moment, when they file a claim and learn their policy excludes rental activity. Landlord insurance is a separate product and you need it.
What Landlord Insurance Covers
Landlord insurance — also called rental property insurance or dwelling fire insurance — is specifically designed for properties you rent to others. A standard policy typically includes:
Property Coverage
Covers the physical structure of your rental property against:
- Fire and smoke damage
- Wind and hail
- Lightning strikes
- Vandalism
- Vehicle damage
- Certain water damage (not flooding — that requires separate flood insurance)
Property coverage pays to repair or rebuild the structure if damaged. It typically does not cover the tenant's personal belongings — that's what renters insurance is for.
Liability Coverage
Covers you if someone is injured on your property and sues you. Examples:
- A tenant slips on an icy sidewalk you failed to treat
- A guest trips on a broken step
- A maintenance worker is injured on the premises
Liability coverage pays for legal defense costs and any judgment against you up to the policy limit. Standard limits are $100,000-$500,000. Consider an umbrella policy for additional coverage.
Loss of Rental Income
If your property becomes uninhabitable due to a covered event — fire, major water damage — this coverage replaces the rental income you lose while the property is being repaired.
This is often overlooked and critically important. If your rental burns down and takes six months to repair, loss of rental income coverage keeps the cash flowing while your property is being rebuilt.
What Homeowner's Insurance Does NOT Cover
If you're renting out a property covered by a standard homeowner's policy:
- Tenant-caused damage — most homeowner's policies exclude damage caused by renters
- Liability from rental activity — slip-and-fall suits from tenants or their guests
- Loss of rental income — homeowner's policies don't replace lost rent
- Commercial activity — renting a property is a business activity, and many homeowner's policies specifically exclude it
Some insurers will cancel your homeowner's policy entirely if they discover you're renting the property. Don't assume you're covered — verify.
Types of Landlord Insurance Policies
DP-1 (Dwelling Fire Policy — Basic Form)
The most basic and least expensive option. Covers only named perils — events specifically listed in the policy.
Covers: Fire, lightning, internal explosion, windstorm, hail, riot, aircraft, vehicles, smoke, vandalism, theft (sometimes)
Does not cover: Anything not specifically listed
Best for: Lower-value properties where premium cost is a primary concern
DP-2 (Dwelling Fire Policy — Broad Form)
A mid-tier policy that covers more perils than DP-1 including falling objects, weight of ice and snow, and water damage from plumbing systems.
Best for: Most independent landlords — good coverage at a reasonable cost
DP-3 (Dwelling Fire Policy — Special Form)
The most comprehensive option. Covers all perils except those specifically excluded. You don't need to worry about whether a specific event is covered — if it's not excluded it's covered.
Covers: Everything except flood, earthquake, normal wear and tear, intentional damage, and other standard exclusions
Best for: Higher-value properties, landlords who want maximum protection
What Landlord Insurance Costs
Landlord insurance costs more than homeowner's insurance — typically 15-25% more — because rental properties carry higher risk.
Typical annual premiums:
| Property Value | Annual Premium Range |
|---|---|
| $75,000 | $700–$1,200 |
| $100,000 | $900–$1,500 |
| $150,000 | $1,200–$2,000 |
| $200,000 | $1,500–$2,500 |
These are rough estimates. Your actual premium depends on:
- Location and local risk factors (crime rate, weather patterns)
- Age and condition of the property
- Coverage limits and deductible
- Claims history
- Policy type (DP-1, DP-2, DP-3)
- Whether you have multiple properties (often eligible for discounts)
Additional Coverages to Consider
Flood Insurance
Standard landlord policies exclude flood damage. If your property is in a flood zone — or even if it isn't, flooding can happen anywhere — consider a separate flood insurance policy through the National Flood Insurance Program (NFIP) or a private insurer.
Umbrella Insurance
An umbrella policy provides additional liability coverage above your landlord policy limits. For $150-300/year you can add $1-2 million in liability coverage. Given the potential cost of a serious liability lawsuit this is one of the best values in insurance.
Earthquake Insurance
Standard policies exclude earthquake damage. If you own property in an earthquake-prone area a separate earthquake policy is worth considering.
Vandalism and Malicious Mischief
Some basic policies exclude vandalism. Verify your policy covers it — especially for properties in higher-crime areas.
Tenant Discrimination Coverage
Covers legal defense costs if a tenant or applicant files a fair housing complaint against you. Less common but worth considering if you're actively growing your portfolio.
Do Tenants Need Renters Insurance?
Your landlord policy covers the structure — not the tenant's belongings. If a fire destroys a tenant's furniture, electronics, and clothing your policy doesn't pay for any of it.
Require renters insurance in your lease. A standard renters insurance policy costs tenants $10-20/month and covers:
- Their personal belongings
- Temporary housing if the unit becomes uninhabitable
- Their personal liability
Many landlords require renters insurance as a lease condition and ask to be named as an additional interested party on the policy. This gives you notification if the policy lapses.
How to Find Landlord Insurance
Start with your current insurer. Your homeowner's or auto insurer may offer landlord coverage. Bundling policies often earns a discount.
Compare quotes from multiple insurers. Landlord insurance pricing varies significantly between companies. Get at least three quotes.
Major providers to consider:
- State Farm
- Allstate
- Farmers
- USAA (if eligible)
- Travelers
- Erie Insurance
- Specialized landlord insurers: Steadily, Obie, American Family
Work with an independent agent. An independent insurance agent can shop multiple carriers on your behalf and find the best coverage at the best price. Particularly valuable if you have multiple properties.
What to Tell Your Insurer
When getting quotes be upfront about:
- The property is a rental — not your primary residence
- Number of units
- Type of tenants (residential vs commercial)
- Any prior claims on the property
- Age and condition of major systems (roof, HVAC, plumbing, electrical)
Failing to disclose rental activity can void your policy.
Managing Insurance Across Your Portfolio
TameRent tracks insurance policy expiration dates and sends renewal reminders — so you're never caught with a lapsed policy on a rental property.
Share this article