Property owners who rent apartments or condos to tenants need to have a special kind of insurance called landlord insurance. Traditional homeowners insurance only covers owner-occupied properties and does not extend coverage to rented spaces.
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A female landlord handing the keys off to her tenants (a young couple).
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If you own rental properties, understanding landlord insurance and what it covers is important.
Landlord insurance explained
Landlord insurance is a type of insurance policy that covers rental properties. It is similar to homeowners insurance, but there are several key differences. Here are the coverages that come with a standard landlord insurance policy:
- Dwelling insurance: Dwelling insurance covers the exterior of the building from certain perils, like fire, falling objects and wind damage.
- Other structures insurance: Other structures insurance covers detached structures on the property, like fences and walkways.
- Personal property insurance: Personal property insurance covers equipment that is used to maintain the rental property, like a lawnmower or snowblower.
- Liability insurance: Liability insurance covers the landlord’s legal fees if a tenant gets injured in a common space, like a stairwell or laundry room, and the landlord is found responsible.
Landlord insurance does not cover everything. This type of insurance does not cover the tenant’s personal belongings, maintenance costs or equipment breakdown costs. It also does not cover owner-occupied properties that are partially rented out through a service like Airbnb.
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Best landlord insurance companies
Landlord insurance is easy to find, but not all landlord insurance companies are created equal. Here are some of the best landlord insurance companies on the market:
Allstate: Best for customizable coverage
| Pros | Cons |
|---|---|
| Less expensive policies | Few discounts |
| Variety of add-on coverage options | No online quotes |
| Good online tools and resources |
Allstate is one of the most popular landlord insurance companies for good reason. The company has excellent financial strength, with an A+ rating from AM Best, and is known for offering comprehensive coverage at an affordable price.
Allstate is our top recommendation for landlords who are looking for customizable coverage. In addition to standard coverage, Allstate customers can purchase vandalism coverage, burglary protection coverage, premises medical protection coverage, building code insurance and fair income protection coverage.
USAA: Best for military members
| Pros | Cons |
|---|---|
| Great customer service | Only available for military and veterans |
| Less expensive policies | Few discounts |
| Homesharing coverage available |
USAA insurance is highly rated, with a score of 900 out of 1,000 in J.D. Power’s 2020 U.S. Insurance Shopping Study. The company also has a superior financial strength rating of A++ from AM Best. The only downside to USAA is that it only sells insurance to active duty military members and veterans.
Landlords who are eligible for USAA coverage can get access to robust coverage options, like income replacement coverage and homesharing coverage. Additionally, USAA landlord insurance policies come with a 25% discount on TransUnion’s SmartMove tenant screening service, which helps landlords find reliable tenants.
American Family: Best for enhanced liability coverage
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| Pros | Cons |
|---|---|
| Option to add extra liability coverage | Coverage is fairly basic |
| Less expensive policies | Limited availability |
| Highly rated based on third-party reviews |
American Family insurance gets high marks across the board. The company was rated 878 out of 1,000 in J.D. Power’s 2020 U.S. Insurance Shopping Study and it has an A rating from AM Best, indicating excellent financial strength. Currently, American Family offers coverage in 19 states.
We recommend American Family to landlords who want to purchase additional liability insurance with a commercial umbrella liability policy. This add-on coverage offers liability coverage up to $2 million, which can be used to cover the cost of tenant medical bills, lawsuits and legal defense.
State Farm: Best for condo owners
| Pros | Cons |
|---|---|
| Less expensive policies | Below average customer service reviews |
| Specific coverage for condo owners | |
| Several discounts available |
State Farm is one of the biggest insurance providers nationwide. The company is rated 860 out of 1,000 in J.D. Power’s 2020 U.S. Insurance Shopping Study, which is above average. State Farm also has superior financial strength, with an A++ rating from AM Best.
State Farm’s landlord insurance is the best option for condo owners. A State Farm Rental Condo Unit owners Policy includes personal property coverage, liability coverage and lost income coverage. Landlords can also purchase inflation protection coverage and loss assessment coverage for an added fee.
Liberty Mutual: Best for discounts
| Pros | Cons |
|---|---|
| Good discount options | More expensive policies |
| Online quotes | Basic coverage |
Liberty Mutual Insurance has mixed ratings. The company is rated below average by J.D. Power and has higher than average customer complaints according to the NAIC Company Complaint Index. However, the company has excellent financial strength, with an A rating from AM Best.
Liberty Mutual landlord insurance is a good option for individuals who are looking to lower their premium with discounts. Liberty Mutual offers savings for bundling home and rental property insurance, being claims-free for at least five years and getting a quote before an existing landlord policy expires.
Geico: Best for cheap policies
| Pros | Cons |
|---|---|
| Less expensive premiums | Basic coverage |
| Online quotes | Below average customer service ratings |
| Coverage for condos and apartments |
Geico is a strong insurance provider on most fronts. In J.D. Power’s 2020 U.S. Insurance Shopping Study, the company was rated the best insurance provider for purchase experience customer satisfaction. Geico also has great financial strength, with an A++ rating from AM Best.
One of the reasons why Geico is so popular is because the company is known for offering cheap policies. Landlords who are looking for affordable insurance policies should consider Geico. The landlord coverage is fairly basic, but there are coverage options for condo owners and apartment owners.
How to get the best landlord insurance for you
Finding the best landlord insurance starts by selecting the right company. However, there are several other factors you should keep in mind when shopping for providers. Here are some suggestions for finding the best landlord insurance for you:
- Shop around: Take your time researching landlord insurance companies, and avoid settling for the first company you find.
- Decide on coverage: Once you identify several contenders, get rate quotes and compare them side-by-side to see which providers can offer the lowest rates.
- Look for discounts: Some landlord insurance companies offer discounts that can lower your premium. Look for providers that offer multiple discounts you can qualify for.
- Get a recommendation: If you know other property owners, consider asking them for an insurance recommendation. Word of mouth is often the best way to find a good insurance company.
Frequently asked questions
Is landlord insurance required?
No, landlord insurance is not legally required. However, it is a good investment for any property owner. It offers legal and financial protection in the event of a covered loss.
How much does landlord insurance cost?
The cost of landlord insurance varies based on the company, the state, the applicant’s age, the condition of the building, the amount of coverage needed and more. Because landlord insurance offers more coverage than standard home insurance, it is typically more expensive.
What is the best home insurance company?
The best home insurance company is different for every individual. It depends on what the homeowner values, how much they want to spend, where they live and what type of coverage they need. However, some of the top-rated providers are Amica, Allstate, Travelers and Chubb.