Best Landlord Insurance | The Motley Fool (2024)

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.

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:

• Property damage to buildings and personal property due to storm, fire, vandalism, theft, and tenant damage. A comprehensive policy will cover replacement costs in a total loss.
• Liability insurance covers the landlord in a liability claim or lawsuit. Let's say a visitor (or even a burglar) is injured on the property. Liability insurance will help cover the costs associated with bodily injury claims.
• Loss of income insurance will help compensate a landlord for rental income lost when no one can live in the rental property due to a covered loss, like fire or storm damage.
• Optional coverages are also available to provide things like rent guarantee, landlord contents, employer liability (if the landlord has employees working on the property), and natural disasters.

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:

• The geographic location of the property and any known risks associated with that area
• Size of the home
• Whether the property has a burglar alarm
• Number of rental units being insured
• Whether the property has fire sprinklers
• Age and condition of the home
• Age and compliance of electrical wiring
• Whether the landlord allows smokers to rent
• Whether the rental has a swimming pool
• Type and amount of coverage
• Whether a housing complex has gated access

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.

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:

Pricing

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:

• Deductibles
• Terms
• Coverage
• The fine print

Discounts

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:

• Discounts offered
• Variety of discounts
• Discount qualifications

Perks/Benefits

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:

• Non-pricing related perks offered
• Benefits unrelated to your coverage
• Perks that stand out in the industry
• Will you actually use the benefit?

Customer Service/Claims Process

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:

• How hard it is to file a claim
• If your provider has a history of resisting payouts
• The customer satisfaction scores for your provider