Landlords are responsible for making sure the rental is livable, safe, and clean for their tenants, and rental property insurance, also called landlord insurance, is a must. It provides coverage for the potential risks and financial losses that come with renting your property.
Renters are generally not held liable for application malfunctions, an injury sustained on the property through no fault of the tenant, fires, or anything else that can go wrong at the hands of humans or by nature.
Coverage will vary depending on the policy, but policies will typically cover the dwelling, property belonging to the landlord, liability coverage, and loss of rental income. It may sound similar to homeowners insurance; however, there are features that aren’t found in homeowners insurance that are necessary for the increased risk that comes with having other people reside on your property.
Rental property insurance is generally 25% more expensive than a homeowners insurance policy. While the average cost of homeowners insurance is $1,445 per year ($120 per month), you can expect the cost of rental property insurance to be around $1,806 or $150 a month.
However, these numbers are just the average. Your situation may call for more liability coverage or add-ons such as vandalism coverage, burglary coverage, rental property under construction coverage, building code coverage, and ordinance or law coverage. You can also purchase a separate umbrella policy if you have a net worth that is more than the liability coverage on your property.
There are also different types of insurance policies that may affect what you pay for rental property insurance. These include:
What you end up paying for rental property insurance depends on the type of policy that you need. Costs also vary by state, county, city, the block where your property is located, and the type of property. Make sure you have the right type and the right amount of coverage.