How to Buy Landlord Insurance for Your Rental Property

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UPDATED: Jul 15, 2021

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Written By: Jeffrey JohnsonUPDATED: Jul 15, 2021Fact Checked

If you are already a landlord or thinking about becoming one by purchasing a rental property in the near future, you need to purchase landlord insurance. Purchasing landlord insurance is a critical, and typically required, step in renting out your home. Whether you are renting out a house, apartment, or space inside your own home, you need to purchase landlord insurance to protect yourself and your property.

Why You Need Landlord Insurance

Landlord insurance is designed not only to cover the rental home or unit, but also to give the landlord added home insurance coverage for exposure to lawsuits that is unique to being a landlord. Whether you are renting out an entire home, apartment unit or the basement unit of your home, you need to have landlord insurance to cover risk that could arise out of renting to a tenant.

Consider the following scenarios:

  • A tenant is cut badly by a stuck window while she was trying to unstick it. She says her injury is the landlord’s fault and is looking to you to pay her medical bills.
  • You evicted a tenant only to find out that she had paid her rent, but it never made it to you and now she is suing for wrongful eviction.
  • The tenant, unknowing to you has a pit bull and it bit someone and now the victim wants to sue you for allowing the dog live there .
  • The tenant left a pan on the stove and the house caught on fire, destroying with it personal property you own and supplied that was in the rental unit such as washer/dryer, a refrigerator and some tools at the property.
  • Your unit was the best in town. It was a fully furnished unit and included heat in the rent. It rented quickly. Two weeks later, it was broken into and everything was stolen!

Your landlord insurance policy will not only cover the home itself, but will provide homeowner liability coverage protecting you from lawsuits and judgments. Your run of the mill homeowner’s insurance does not offer this protection when you rent out your home or apartment building.

What Rental Home Insurance Covers

The following coverage should be on your landlord insurance quote (your actual quote may very by the general coverage should be outline within the quote)(unclear what this is supposed to say):

  • The rental home insurance must provide coverage for the dwelling itself. Your agent should run a replacement cost calculation on the property to determine the actual replacement cost of the rental dwelling. This does not include the land upon which the dwelling sits (if the dwelling burns down, the land is still there). Make sure you explain all the particulars of your rental dwelling-screen porch, ceramic tile or hardwoods. This will give the agent or insurance company a more accurate depiction of the value of the home.
  • Your landlord insurance coverage should provide for any personal property you have in the rental units that do not belong to tenants. Make a list of all the personal property you want to cover in the rental dwelling-refrigerator you supplied, washer/dyer, tools, etc. If you have nothing in the dwelling, you should keep this amount at the minimum limits. Make sure, however, if you get a new lease on the home and concede to supplying the washer and dryer and maybe the refrigerator, that you update this limit to reflect any new exposure you may have.
  • Landlord insurance should cover you if the home is not livable due to a covered loss. If the home is destroyed or seriously damaged to the point where you can’t rent it, then you will lose rental income. Make sure your policy covers your lost income.
  • Rental Property Insurance should provide landlord liability protection. There is so much that can occur in a rental property. The fact is, landlords are not there every day, every week or even every month. There could be dangerous situations that have developed over time, and you could end up liable for damages even if you had nothing to do with an accident. You may also consider umbrella coverage to provide you with even more coverage above the landlord liability limits of your rental property insurance.

TIP: Tenants sometimes have the opinion that landlord are rich! For this reason, if injury should occur, the amount of a claim can escalate quickly. Mitigate any potential lawsuits by repairing any dangerous damage quickly. Inspect your property at least once a year if not twice.

Rental Home Insurance for Your Basement Apartment

If you are renting out a section of your home or perhaps a basement apartment, check with your insurance agent or home insurance company first. If your unit has a separate entrance, it may be necessary to secure a rental home insurance policy for the unit. Check to see what your home insurance carrier’s requirements are for the rental unit, and make sure you are compliant. Don’t just jump on the bare minimum coverage if you are renting out a room in your home! Remember, we are talking about the rental unit that is attached to your personal home. If nothing else, write a clause in your lease that requires the tenant to maintain renter’s insurance of their own at all times during the term of the lease. The tenants own rental policy will provide personal liability coverage for the tenant that could provide you additional coverage in the event the tenant damages or destroys the dwelling through his or her negligence.

TIP: Get the amount of insurance you need to protect your home and rental unit from damage or liability. Calculate how much your home and possessions are worth, and insure yourself appropriately to protect from total loss.

Claims under your Landlord Insurance

If you have a home disaster (i.e., fire, hurricane damage, an explosion) first and foremost, contact your rental home insurance company immediately. Secure all damaged items at the dwelling to prevent further damage, and make sure all tenants are safely removed from the home. Supply the insurance company with a copy of your lease or any other documents they request to assist in determining the amount for any loss of use claim. Make sure you secure estimates for repairs and make yourself available to the insurance adjuster so that repairs can begin as soon as possible.

TIP: If you are notified of a potential danger at your property by your tenant, make sure you address it immediately. The fact that you did not remedy any situation that becomes a claim could put you at a greater risk of being sued. If you find yourself being sued or in a lawsuit for damage or injury that occurred at your rental home, get the advice of an attorney.

Rental homes or units can provide a landlord with extra income, but require landlord insurance to cover the additional layer of risk associated with being a landlord. Talk to your agent extensively about the type of rental dwelling you are renting. Let your agent know if it is being rented furnished, and if so, make sure your rental home insurance properly insures those items. Also discuss the personal liability limit under your landlord insurance policy, and make certain you have proper liability protection. Inquire about the personal injury protection coverage which includes coverage for such things as libel, slander or wrongful eviction. These things can happen. Landlord insurance provides the additional landlord liability coverage for the risks associated with being a landlord. A relatively inexpensive policy, landlord insurance is well worth the cost.

If you would like a free quote for landlord insurance that will cover your rental dwelling and give you the extra coverage for risk associated with being a landlord, click here and visit the Free Advice quote center today.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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