Landlord insurance is something many property owners set up once and then forget. It feels like a safety net that’s always there. But your property, tenants, and local laws change over time, and your policy might not always keep up.
Reviewing your landlord insurance regularly helps make sure your coverage still matches your needs. It protects you from being underinsured or paying for protection you no longer need. A short checkup once a year can save you money and prevent major financial problems later.
Why Reviewing Your Landlord Insurance Matters
Your insurance policy is not just paperwork. It’s a contract that reflects your property’s value, your risks, and your legal responsibilities as a landlord.
Over time, many things can change:
- Property values and repair costs increase
- Tenants come and go
- Local regulations and lender requirements shift
- New coverage options become available
If you never update your policy, you could end up with coverage gaps that leave you paying out of pocket after a loss. On the other hand, you might also be paying for coverage you no longer need. Regular reviews keep your protection accurate and cost-effective.
How Often Should You Review Your Landlord Insurance?
The best practice is to review your policy once every year or anytime your rental situation changes. An annual review helps ensure your coverage reflects your property’s current condition and market value.
You should also schedule a review when:
- You renovate, remodel, or add new appliances
- Rent or property values increase
- You change tenants or lease terms
- You file a claim or change landlord insurance providers
- You refinance or transfer property ownership
A yearly review can also uncover potential discounts. Many insurers reward claim-free years or added safety features with lower rates.
Signs It’s Time to Reassess Your Landlord Insurance Coverage
Sometimes, the need to review your policy shows up in subtle ways. If any of the following apply to you, it’s time for an update.
- You’ve installed new systems, such as HVAC or security upgrades
- Local property values have gone up significantly
- You’ve switched from long-term to short-term rentals
- You’ve noticed rising premiums or new exclusions in your policy
- You’ve added co-owners or formed an LLC for your property
These changes all affect how your property is insured. Ignoring them can leave you exposed to uncovered losses or policy conflicts.
What to Check When Reviewing Your Landlord Insurance
A policy review is not just about renewing coverage. It’s about confirming that every part of your protection still fits your property. Here’s what to focus on during your review:
Coverage Limits
Make sure your landlord insurance policy’s dwelling coverage or rebuild cost matches current construction prices and materials, which can rise sharply with inflation.
If your limit is based on last year's costs, you could be severely underinsured and unable to fully rebuild after a total loss. This is the most important figure to verify, ensuring your protection keeps pace with reality.
Liability Coverage
Check that your liability limits are sufficient to cover potential tenant injuries, guest lawsuits, or accidental damage to property you may be responsible for.
As legal costs and medical expenses rise, a limit that was adequate five years ago may no longer be enough to protect your personal assets from a major lawsuit. This coverage is your financial defense against slip-and-fall claims or other common incidents.
Loss of Rent Coverage
Confirm that the payout limit for "loss of rent" coverage matches your current rental income, not what you were charging when you first bought the policy.
If a covered event like a fire makes the unit uninhabitable, this coverage replaces your lost cash flow during the months of repair. If your rents have increased, your coverage limit must be increased as well.
Excluded Perils
Take time to review what causes of loss are not covered by your policy, as common exclusions include floods, earthquakes, sewer backups, and mold.
If your property is in an area prone to these risks, you must purchase separate policies or add specific riders (endorsements) to fill these critical coverage gaps. Never assume your policy covers every type of disaster. Check Obie's property risk map, so you can add more protection for your property.
Deductibles
Review your deductible and adjust it based on your current financial comfort level and how much you can afford to pay out of pocket on short notice.
While raising your deductible can lower your annual premium, you must be prepared to cover that higher amount if you need to file a claim. Conversely, a lower deductible means a higher premium but less of an immediate financial hit.
This quick review ensures your insurance evolves with your property and not the other way around.
How Life and Property Changes Affect Your Policy
Even small updates to your property or lifestyle can change your insurance needs.
Property Improvements
Adding a deck, renovating the kitchen, or upgrading electrical systems all increase the replacement cost of your building.
Without updating your landlord insurance policy to reflect property improvements, you may end up severely underinsured. It's crucial to inform your insurer of these changes to adjust your dwelling coverage, ensuring you can rebuild fully after a major loss.
Ownership Structure
Moving your property into a trust or LLC is a significant change that can require a new policy type or a specific endorsement.
Your insurer needs to know who legally owns the property, as the "named insured" must be the correct legal entity to process claims correctly. A mismatch in ownership can lead to a claim being denied, so this administrative update is critical.
Tenant Type
Switching from long-term leases to short-term or furnished rentals often needs different coverage terms. Insurers view short-term rentals (like Airbnb) as a higher-risk, business-related activity, which may not be covered by a standard landlord policy.
You will likely need a specific rider or a commercial policy to ensure you are protected against the unique liabilities associated with transient guests.
Rental Income Growth
If your rent has gone up over time, your "loss of rent" coverage should be updated to match that higher amount. This coverage, also known as "fair rental value," pays your lost income if a covered peril (like a fire) makes the property uninhabitable during repairs. Make sure to increase rental property payments without tenants leaving, so you can make the most of your policy.
Failing to increase this limit means you could face a significant financial shortfall during a lengthy rebuilding process.
A simple review after each major change keeps your policy aligned with your real risks.
FAQs about Reviewing Your Landlord Insurance
How often should landlords review their insurance policies?
At least once a year, or anytime there’s a change in property value, tenants, or coverage needs.
What happens if I don’t update my landlord insurance?
You may end up underinsured or have claims denied if your coverage doesn’t match the property’s current condition or value.
Can I change my coverage mid-policy?
Yes. Most insurers let you adjust coverage at any time, especially after major renovations or tenant changes.
Do property upgrades increase insurance costs?
They can, but they also improve your property’s value. Updating your policy ensures the new features are protected.
How long does a landlord insurance review take?
Usually less than an hour. A quick annual check can save time, money, and stress in the long run.
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