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Landlords have to juggle a lot of things that can go very right or very wrong. One way to protect yourself as a landlord is to purchase the right landlord insurance. Here, we share the best landlord insurance providers, talk about how landlord coverage differs from standard homeowners insurance, and help you understand what goes into determining the price of landlord insurance.
Let's take a closer look at each insurer and why it made the list.
We like Farmers' full coverage approach with landlord insurance. The company's extended replacement cost policy is tough to beat. When material supplies are low, and building costs are through the roof, this extended replacement cost policy can mean the difference between rebuilding now and waiting for prices to fall.
In addition, Farmers offers an extra hand when it's time to screen and select new tenants. Farmers offers landlords SmartMove™ -- a tenant screening service through TransUnion. All it needs is an email address and it provides an in-depth tenant suitability report within minutes. There are no setup fees and the landlord can open an account quickly and be screening instantly. However, Farmer's is ranked near the bottom in J.D. Power's 2022 U.S. Home Insurance Study.
American Family provides additional protection on top of a landlord's primary general liability coverage, which can help protect against financial losses. Its commercial umbrella liability protection gives landlords extra security against legal and financial actions. Like Farmers, American Family will also hook a landlord up with SmartMove, an easy way to find qualified tenants.
American Family is ranked No. 2 in J.D. Power's 2022 U.S. Home Insurance Study. It also provides a wealth of materials, from marketing and advertising to property maintenance. Called the Landlord Toolbox, the online resources can help answer many questions landlords have. The downside to American Family landlord property insurance is that it's currently only available in 19 states.
State Farm offers landlords additional coverages to protect them against increased risks. For example, State Farm landlord coverage provides protection from various perils that could befall a home's mechanical equipment.
The company offers reimbursement for payments a landlord makes to a tenant due to heat or air conditioning loss. It even covers "tenant move back expenses." If a tenant must leave the premises due to a covered loss, State Farm covers the cost of moving them back in. State Farm provides coverage for data breaches or identity theft. It also offers coverage for "ordinance or law," which covers the cost to upgrade the building due to enforcement of municipal laws and ordinances following a covered claim.
Liberty Mutual provides all the basic coverages, like dwelling, liability, and wind and hail. Liberty offers discounts for bundling, if landlords request a quote before their policy with another carrier expires, and if a landlord is "claims-free." Landlords who haven't filed a claim for five years or more will get a discount. Liberty Mutual also offers additional coverage options such as inflation protection to help cover repairs as costs rise, and also cover lost rent if there is damage to the home and repairs are taking place while it is unoccupied.
In combination with standard coverage, landlords using Allstate can add an umbrella policy that covers the extras they most want to protect. While some companies make it easier to customize a policy than others, umbrella policies do the trick in a pinch. Landlords can also add optional coverages for even greater protection. Allstate offers coverage for vandalism, burglary, rental property under construction, and increased costs related to enforcing any building codes, ordinances, or laws.
The data found on this page is a combination of publicly available quote data obtained directly from the carrier as well as insurance rate data from Quadrant Information Services. These rates were publicly sourced from the top ten (10) to fifteen (15) carrier markets, within each state, based on annual written premium and should be used for comparative purposes only -- your own quotes may be different.
Insurance products are then rated on a scale of one to five stars, primarily focusing on:
With so many options for insurance across the board these days, it's easiest, and quite effective, to first look at the bottom line. Do single out competitive prices across insurance categories it's important to focus on:
Insurance provides coverage for unexpected financial burdens and piece of mind. But it's important to check your policies and see how you can lower your premium. Insurance companies offer discounts for all sorts of things now from safety devices to good grades to automatic bill pay. Pay attention to:
The benefits of insurance these days have gone far beyond just what your policy covers. Most companies and policies come with perks -- some of which may be completely unrelated to your insurance policy. Take a look at:
Policy research and coverage options are great, but how is the process when you have to actually use your insurance policy? The best coverage doesn't hold much value if it's a hassle to get paid out. Pay special attention to:
Offer | Best For | Next Steps |
---|---|---|
Farmers
|
Great For: Best for providing all the bells and whistles | |
American Family
|
Great For: Best for commercial liability coverage | |
State Farm
|
Great For: Best for additional coverage | |
Liberty Mutual
|
Great For: Best for discounts | |
Allstate
|
Great For: Best for personalized coverage |
Rental property insurance covers a property owner from financial loss related to rental properties. Landlord policy can provide protection from unforeseen repair bills, possible loss of rent, and even the cost of rebuilding the property if there's damage from a natural disaster. Like a homeowners insurance policy, the level of coverage varies depending on the policy chosen.
Typically, the more comprehensive the coverage, the higher the premium. Price isn't the only important consideration, though. It's just as important to find a level of protection that makes being a landlord a little less stressful.
Landlord insurance coverage varies by policy, but typically, a landlord policy covers:
Each coverage type is subject to deductibles and limits as stated in the policy.
The primary difference between landlord insurance and homeowners insurance is whether the property owner resides in the home as their primary residence. If a property is the owner's primary residence, they will need a homeowners policy. If they're renting a property to another party, they'll need landlord insurance.
Another difference, according to the Insurance Information Institute (III), is that most landlord insurance policies cost around 25% more than a standard homeowners policy. Landlords need more protection than the average owner.
Many factors go into determining the cost of a landlord insurance policy. They include:
Being a landlord is no joke. There always seems to be an issue to take care of. From dealing with maintenance to determining whether their insurance includes dog breed restrictions, landlords are busy people. Working with the right insurance company can take a huge weight off a landlord's shoulders, leaving them with extra time.
The trick is to shop around. Options vary by insurance provider and costs are all over the map. The best way to ensure adequate property coverage at the lowest possible price is to look at several top rated insurers.
Landlord insurance typically covers property damage, liability protection, and loss of rental income due to covered events, helping safeguard both your investment and your rental income.
While not required by law, many mortgage lenders may require landlord insurance, and it's highly recommended to protect against risks not covered by standard homeowners insurance.
Costs vary depending on the property location, size, and coverage level, but it's generally more expensive than homeowners insurance due to the added risk of renting out a property.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.