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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.
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.
|Offer||Best For||Next Steps|
|Great For: Best for providing all the bells and whistles|
|Great For: Best for commercial liability coverage|
|Great For: Best for additional coverage|
|Great For: Best for discounts|
|Great For: Best for personalized coverage|
Our Insurance Expert
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