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Best landlord insurance
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Property owners who rent their homes to tenants need a different form of insurance, called landlord insurance or dwelling fire insurance. Traditional homeowners insurance only covers owner-occupied properties. However, homeowners insurance policies do not extend coverage to that same property if it is rented to tenants. If you own a rental property, understanding your need for landlord insurance and its coverage is important. And Bankrate makes it easier to find the best landlord insurance policy by breaking down the top landlord insurance companies, based on our assessment.
What is landlord insurance?
Landlord insurance, as the name suggests, covers risk to a property you own and rent out. It works similarly to a standard homeowners insurance policy and includes many of the same coverage options, with some key differences. Landlord insurance provides coverage if your property is damaged from covered perils, such as fire and windstorm damage. However, it does not cover tenant belongings within the home. For that, your tenants need renters insurance. Although coverage types may vary by carrier, many landlord insurance policies include loss of rents coverage, which covers lost rental income while a home is uninhabitable due to a covered loss.
Like homeowners insurance, landlord insurance is usually required if your tenant-occupied property has a mortgage. Even if your home is paid off, it may be worth considering having this coverage to avoid rebuilding or repairing your home out of pocket should you incur substantial property damage.
Best landlord insurance companies
To find the best landlord insurance companies, Bankrate’s research team reviewed multiple factors, including financial strength, customer service, cost and available discounts. We also reviewed each company’s website to see which insurer made it easy to conduct business online and looked at optional coverage that helps customize your policy, so it works best for your situation.
Below are some of the landlord insurance companies worth considering, based on our findings:
|Insurance company||Best for||AM Best rating|
|American Family||Enhanced liability coverage||A|
|State Farm||Condo and apartment owners||A++|
Allstate: Best for personalized coverage
Allstate may be worth considering for landlords looking for personalized coverage. All Allstate policies come with fair income coverage, which pays the rental income you would otherwise earn if your unit becomes uninhabitable due to a covered loss. In addition to standard coverage types, Allstate policyholders can choose from various add-ons, including vandalism coverage for vacant units, building code coverage and rental property under construction coverage. Allstate does not offer online quoting for landlord insurance, so you will have to call the company or contact a local agent for a quote.
American Family: Best for enhanced liability coverage
American Family may be worth considering for landlords interested in purchasing robust coverage on their properties, such as commercial umbrella liability protection. The company also offers landlord insurance policies for business owners, which cover business essentials that are not covered under typical landlord policies, such as auxiliary structure coverage. Shoppers who are new to property rental and management may appreciate AmFam’s Landlord Toolbox, which offers resources on common topics for property owners. These include articles on state tenant laws, property upkeep and tenant selection. However, the insurance company does have limited state availability and no online quote option for landlord insurance.
State Farm: Best for apartment and condo owners
State Farm landlord insurance policies vary based on whether you rent out a home, condo or apartment, with specialized policies for each property type. All three policy types include loss of rents coverage. The carrier’s apartment landlord insurance includes equipment breakdown coverage and heating and air conditioning loss reimbursement, while condo landlord insurance includes inflation coverage and loss assessment coverage. Policyholders may also save with potential discounts for home safety devices. If you’re having trouble navigating the landlord insurance market, you may appreciate State Farm’s many local agents available for face-to-face service.
Farmers: Best for first-time landlords
Landlord insurance policies from Farmers are fairly basic, but policyholders can choose from a handful of endorsements, like loss of rents coverage, personal property coverage and other structures coverage. If you’re a first-time landlord, selecting a tenant can be stressful. Farmers offers a quick screening tool called SmartMove, which provides in-depth reports on tenant suitability to potentially minimize risks for landlords. Like most other landlord insurance companies, online quotes are not available for this policy type.
Geico: Best for accessibility
Geico may be a great landlord insurance company for property owners looking for robust policies with easy digital property management tools. Geico’s website and mobile app allow policyholders to easily manage their policies and file a claim on-the-go. The carrier offers standard coverage types, including loss of rent payments coverage, as well as options add-ons like vandalism coverage and additional building code construction expenses coverage. Unlike many competitors, Geico does offer online quoting for landlord insurance. However, policies are underwritten by affiliate companies, so the actual company underwriting your policy may vary.
How to find the best cheap landlord insurance
The best landlord insurance for you may vary based on your property type, location, budget and personal preferences. For example, landlords with multiple properties may appreciate a carrier with an easy-to-use mobile app to easily manage their policies virtually. Landlords with older rental properties may want a carrier that offers building code coverage to financially protect their property while the home is under construction to bring it up to code. To find the best cheap coverage for you, you might consider these steps:
- Compare coverage options: Included coverage types and available endorsements may vary between companies. Considering your coverage needs and comparing available options from different carriers may help you narrow down which companies might meet your needs.
- Consider third-party scores and ratings: Organizations like AM Best, J.D. Power and the National Association of Insurance Commissioners (NAIC) review insurance companies based on financial strength, customer satisfaction and digital tool capabilities. Reviewing these metrics may help you determine how well a company might be able to meet your insurance needs.
- Compare quotes and discounts: Your cost of landlord insurance may vary based on your property’s characteristics, your personal rating factors, your coverage selections and more. Comparing quotes is likely the most accurate way to identify the cheapest company for you. Reviewing potential discounts may also show you where you could save with each carrier.
Speaking with a licensed insurance agent may help guide your landlord insurance shopping process.