Landlord Insurance Cost

How Much Does Landlord Insurance Cost?

July 15, 2022

Real estate is one of the most lucrative markets for investors who want dependable revenue sources with little tax implications. It’s not like rental property owners don’t pay taxes like the rest of us, but they’re able to deduct their expenses from managing the property which in turn lowers their taxable income. So, despite the great tax benefits, landlords do typically pay more to insure their property than a regular homeowner.

This is because insurance carriers view rental properties as more risk since the residence is tenant-occupied. On average, carriers see more claims accumulated in these instances.

So, in this article, we’ll discuss the many factors that affect landlord insurance rates. Let’s get started.

What Factors Affect the Cost of Landlord Insurance?

Properties are a great financial investment; therefore, to safeguard your assets you’ll need adequate insurance coverage. It’s important to note, landlord insurance, also known as rental property insurance, is by no means cheap. In fact, these policies tend to cost 25 percent more than a typical homeowners insurance policy.

However, the cost varies based on a number of factors. No two rental properties are the same! The following should give you a clearer understanding of what generally affects your rates:

  • Location of the property
  • Crime in the area
  • Value of the home 
  • Amenities onsite 
  • Square footage of the property
  • Your deductible, coverages, and add-ons 
  • Environmental risk 
  • Type of rental property
  • Tenant turnover 
  • Claims history 

Average Landlord Insurance Cost

Landlord insurance covers the cost to repair or replace materials damaged in the wake of an event. Keep in mind, not everything will be covered, only the perils stated in your policy. A covered peril could be damages incurred from a natural disaster (minus a flood), a tenant, lawsuits, loss of income, and so forth.

The great thing with landlord insurance is you can extend and add on coverage as you see necessary. However, before you make that leap and purchase landlord insurance, you’ll probably want a rough idea of what the average cost is. Nationally, landlords are paying $1,288 a year on average. 

Knowing that you should seek assistance from a reputable insurance agency that’s experienced in insuring investment properties. This way your agent can inform you on industry risks and trends. With a knowledgeable agent, you’ll know what coverage you need and how much.

Summing Up

Insurance policies can be very complicated. They’re detailed, lengthy, and use complex jargon. So, with the help of your agent, carefully read over the policy, particularly the section discussing covered perils and exclusions. Being proactive from the start is the best way to secure your investment property.


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