What Is Landlord Insurance, And Why Do You Need It?

What Is Landlord Insurance, And Why Do You Need It?

Landlords need to carefully consider all the options for protecting their rental property and thus their income – which will most likely require a different kind of insurance than a typical homeowners policy. Also called rental property insurance, landlord insurance is a very sensible investment for property owners, whether they’re only looking at a series of short-term rentals for a single-family unit or long-term rentals for a large apartment building.

A landlord’s insurance policy covers a variety of situations, including paying for the replacement cost of the building in the event of a fire as well as legal fees if a tenant sues for damages. Provided that it is considered a covered loss, an insurer will provide funds according to the amount of coverage a landlord selected.

Determining if you should get a landlord insurance policy is something that most first-time rental property owners will debate. Lenders will often require this type of insurance before lending the money necessary for purchasing a rental property.

If the property is your primary residence, you’ll need a homeowners insurance policy. If you’re renting it out, you’ll need to buy landlord insurance.

  • Homeowners Insurance
    This insurance is only for your primary residence and covers the building and covers personal property damage, liability, and a few other things. See also Incidental Occupany.
  • Landlord Insurance
    Specifically, for property owners who plan on renting out a family home, apartment, or condo for an extended period and covers damages for events such as fires, burst pipes, or some natural disasters. Landlord insurance will also provide liability protection if a tenant or guest sues, and the property owner needs to pay for legal fees or medical expenses.

Generally, a landlord insurance policy costs about 25% more than a homeowners insurance policy for the same property. This might sound like a large price increase when compared to homeowner insurance. But insurance providers can deny you a claim if you are renting out your property and do not have the appropriate insurance coverages provided by landlord insurance. The upside is that you are permitted to make a tax deduction for the entire landlord insurance premium for your rental property. The IRS considers this a normal business expense when renting out real estate.

Some people own real estate in their own name and manage it personally, then claim the expense on their personal tax returns.  Others choose to hold property in an LLC as a business entity.  Either way, all insurance premiums associated with the rental property are tax-deductible.

Landlord Insurance providers like Steadily offer online landlord insurance in minutes, making the process simple, easy, and affordable. You can get a quote with coverage as early as the next business day. With national coverage and service for all types of properties – single family homes, condos, apartment buildings, vacation rentals, Airbnbs, and more. With landlord insurance, you can focus less on claims, and more on what matters: growing your rental property business.

About the author:

Datha Santomieri is the co-founder and vice president of Steadily, a national insurance agency focused on providing a tech-forward experience for landlords to secure a quote for their properties within minutes. Before founding Steadily, Datha spent ten years at Brown & Brown in the National Programs Division leading operations and implementing key programs and acquisitions. Her early career was spent in GEICO’s management training program in Lakeland, FL. Datha studied at Richmond American International University in London and American University in Cairo before graduating from the University of Tampa. She is a CPCU and a CIC, so she loves to talk insurance.