Investing in real estate comes with a handful of responsibilities, including keeping your rental property in good condition and protecting the value of your investment.
While having the right landlord insurance policy in place is vital for owning a rental property, finding the best landlord insurance coverage can sometimes be challenging. This article is intended to make your research a little easier!
Keep reading to learn more about finding the best landlord insurance and some of the top companies to consider when purchasing insurance for a rental property. At the end of this article, we'll cover some of the frequently asked questions real estate investors have about landlord insurance for rental property.
Looking to protect yourself and your investment? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forth with brokers. On average, landlords save 25% with Obie.
How to Find the Best Landlord Insurance
Finding the best landlord insurance for your rental property can be more complicated than looking for homeowners insurance because so many options are available.
It's essential to spend enough time researching insurance coverage online, getting multiple quotes, comparing them side by side, and looking for discounts that can save you money and increase your potential return on investment.
Obie offers instant insurance built for landlords and real estate investors, so you can get the coverage you need for your specific property without spending countless hours trying to figure everything out yourself.
Enter the property address and get an instant quote online for landlord insurance for properties with one to four units. Coverage is available in all 50 states and investors have insured more than $4 billion in property with Obie to date.
Obie provides full transparency into the insurance process, saving landlords and investors time and money. If you already have landlord insurance with another carrier, consider switching. On average, people can save up to 25% with Obie.
Best Landlord Insurance Providers
Although Obie is a great way to find the best landlord insurance online, you may prefer to shop for quotes yourself. Here are some of the top landlord insurance providers for rental property, listed in alphabetical order, according to research from Bankrate, Investopedia, The Ascent, and Value Penguin.
Allstate Insurance Corporation was founded in 1931. It has an A+ Financial Strength Rating from AM Best and an AA- from S&P Global Rating. The company is known for its affordable coverages, including landlord coverage.
Its coverage includes damages to the property's structure, additional structures, loss of income, medical protection, burglary, vandalism, and liability claims. It also consists of a building code policy that applies when you are fixing the unit, and there are applicable costs to meet building codes.
In addition, you can get coverage when your rental unit is undergoing renovations, or you are constructing a new rental unit. Additional coverage you can consider includes flood insurance and personal umbrella insurance.
While you cannot get a quote online, there is an online search you can use to find a local agent to help you. You can also use its online tool to search for common and expensive claims in your area. Knowing about potential claims can help you prepare better and add additional policies before purchasing your coverage. Most importantly, you can enjoy discounts that lower your insurance costs, such as bundling policies.
Liberty Mutual Group is over 100 years old and has made a name for itself since it was founded in 1912, becoming the country's sixth-largest casualty and property insurer.
We live in the digital era, and Liberty Mutual saves you time by providing a quote for any insurance needs on its website. This service even allows you to bundle two types of coverage together. In addition, the carrier has an A rating from both AM Best and S&P and offers various coverage options.
You can call for a customized quote that meets your specific needs for starters. Its landlord insurance provides coverage against the property's structure, loss of rent, and liability claims. In addition, it has 24-hour claims assistance.
But perhaps what makes their option worth considering is that you can have an inflation protection add-on. Inflation protection add-on automatically increases your coverage over time to reflect rising costs of materials and labor. But, of course, any add-on to the standard coverage will come at an additional cost in your premium.
In addition, you get to enjoy discounts when:
You insure your home and rental property
Shop for the coverage early, preferably before the expiration of your current coverage with another insurer
Go for 5+ years without a claim, including a claim with a previous insurance carrier
State Farm Insurance
State Farm Insurance was founded in 1922 and has grown over the century into a powerhouse with an AA S&P Global Rating and AM Best's A++ Financial Strength Rating. It offers various financial services, including banking, investing, and insurance.
It offers several insurance coverages for homes and properties. Its rental dwelling policy is a good option to consider if you rent out a single or multi-family home unit. If you have a condo or an apartment unit, the rental condo unit owners' policy and insurance for landlords are great.
Whichever policy option you have, you will still enjoy coverage against structural damages, damage to additional structures attached to the property, personal property damages, theft, liability claims, and loss of income. The coverage also includes law or ordinance coverage, which protects against loss of value or the rise of costs arising from enforcement of an ordinance or municipality laws that regulate the repairing or the construction of damaged properties.
You can add more coverage to ensure you are protected against any additional risks. However, this will incur more expenses, raising your premiums perhaps more than anticipated. State Farm also offers online services, like getting an agent nearby, direct quotes, and paying your insurance bills automatically.
Travelers Insurance, or The Travelers Companies, Inc., was founded in 1853 and is one of the oldest insurance institutions in the United States. More than 165 years later, the company still ranks as one of the best insurers, with an A++ Financial Strength Rating (FSR) from AM Best.
Its landlord insurance coverage is aimed at landlords with one to four rental property units like condos, apartments, and family homes (single or multi). It provides the usual structural damage coverage and covers additional structures like garages and sheds, and covers theft and loss of income.
In addition, if you are renting a furnished unit with furniture and appliances, the policy will provide coverage against damage to these.
Travelers can also help you find a professional agent close to you through their website. This can help you save time searching for a local insurance agent to work with.
Other Landlord Insurance Companies to Consider
The above list of landlord insurance companies is by no means exhaustive. Other options to consider when looking for insurance for your rental property include:
American Family is rated by Bankrate as the best for enhanced liability coverage
Farmers is ranked as the best insurance company for providing all the “bells and whistles” by The Ascent
Foremost Insurance Group is ranked as the best for landlords with multiple rental properties by Investopedia
Geico is the best insurance company for cheap policies, according to Bankrate
USAA is rated as the best landlord insurance company for military members by Bankrate
Do I really need landlord insurance?
Yes. If you plan to make money by renting out a home, homeowner's insurance will no longer apply. Unlike the homeowner’s coverage, landlord insurance can include additional liability and loss of rental income.
What is the difference between homeowners and landlord insurance?
Apart from the covered risks that are more extensive with landlord coverage, it also matters who resides on the property. A homeowner’s insurance policy will still apply if the rental is your primary residence. Perhaps you have converted a room or two while still living on the property. But if you rent the entire property and no longer reside there, you should have landlord insurance.
What influences the cost of landlord insurance coverage?
The property’s geographic location, including its known risks like flooding and hurricanes
Size of the property
Age and condition of the property
The property’s electrical wiring condition and age
Available security features in the property, like a burglar alarm and smoke detectors
Risks covered in the policy
How many rental units you are insuring
Additional structures or outbuildings on the property
Does landlord insurance have exclusions?
Yes, landlord insurance has some exclusions. For example, although it covers damages to the property's structure, it does not cover repairs, updates, and maintenance costs. It also excludes:
The tenant's personal belongings. Your tenants need to have renters insurance to cover losses against theft or damage to their personal property. It is always recommended you have this as a requirement for your tenants, provided that local and state landlord-tenant laws allow it. Some insurers will even have it as a requirement for landlord insurance.
Damages from earthquakes, floods, and water backups. However, you may be able to get these as additional policies in your coverage if you live in an area prone to such risks.
The best landlord insurance is different for every real estate investor. That’s why it’s important to research and compare quotes to find the right insurance for your rental property. Choosing the best insurance policy for a rental property is about more than price. Consider coverage limits and exclusions, how customizable a policy is, and how transparent the entire process is.
If you’re looking for an easy way to protect yourself and your investment, get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.