What you need to know about landlord insurance

There are more than 11 million landlords in the U.S., and a new rental unit hits the market every 80 seconds, according to statistics from the Rental Protection Agency.¹ While the number of rental units grows, so does the responsibility of owning a rental property. You not only have to find good tenants, but you're responsible for the property’s upkeep and maintenance.

What if the property is damaged in a storm, or is vandalized? To ease owners’ concerns and provide protection for situations that are beyond their control, you should consider landlord insurance. If you are a first time landlord, view our list of tips to be successful.

What is landlord insurance?

Landlord insurance provides financial protection if your rental property is damaged, becomes unlivable after a catastrophic event such as a fire or a storm, or if someone is hurt on the property.

Standard homeowners insurance only provides limited coverage for rental properties, which is why a separate landlord policy is necessary.

What does landlord insurance cover?

Insurance policies vary, but most landlord insurance policies offer coverage for the following:²

Property damage insurance

A landlord policy typically covers any physical damage to the home that's caused by fire, bad weather or criminal activity such as a break-in. It also covers any additional buildings, including a shed or detached garage. Equipment, like lawn mowers and snow blowers kept on the property to maintain it, is also covered.

Liability insurance

If someone is hurt while living in the rental property or visiting it, landlord insurance can help cover that person’s medical costs, legal fees and settlements.

Loss of income insurance

If your rental property is damaged by a covered loss, such as a fire or tornado, and the damage keeps you from renting it out, most policies will reimburse you for the income lost during that time.

What landlord insurance doesn't cover

Landlord insurance doesn't cover a tenant's belongings. For example, if the tenant's car, furniture and antique china collection are lost in a fire, landlord insurance doesn't cover that. You should encourage your tenants to get renters insurance to cover their belongings.

Landlord insurance doesn't cover repairs, either; if the dishwasher breaks or the furnace goes out, you're responsible.

Buying landlord insurance is a safe way to protect your investment. Owning a rental property isn't always easy, but purchasing Nationwide's rental property coverage is one of the easiest decisions you can make as a landlord.

How much is landlord insurance?

Rental properties carry a higher risk of damage and other incidents, so landlord insurance tends to be more expensive than homeowners insurance. That price can be affected by the length of time the property is rented. Tenants who only rent for a short time rather than a year are less likely to be attentive to maintenance issues, increasing the chances of a major problem and raising landlord insurance cost because of it.³

[1] https://www.pewresearch.org/fact-tank/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/, Accessed March 2022.
[2] "What Type of Insurance Do I Need If I'm Renting Out My Home?" Insurance Information Institute (2017). http://www.iii.org/article/what-type-of-insurance-do-i-need-if-im-renting-out-my-home
[3] https://www.investopedia.com/articles/personal-finance/061515/quick-guide-landlord-insurance.asp, Accessed March 2022.