In this guide

Landlord insurance is property insurance written for a home you rent out to others. It typically covers the building and other structures, can replace lost rental income after a covered loss, and includes liability protection for the owner. It generally does not cover your tenants' belongings, and a regular homeowners policy often will not respond properly once a tenant, or a paying guest, is living in the property.

Key takeaways

  • A standard homeowners policy is designed for owner-occupied homes. Rented homes usually need a landlord or dwelling fire policy.
  • Landlord policies commonly cover the building, other structures, the owner's own property, lost rental income and some liability.
  • Tenants' belongings are not covered by the landlord's policy. Tenants need renters insurance.
  • Short-term rentals are a major gap: homeowners and dwelling policies often are not designed for them, per NAIC guidance.
  • Flood, earthquake and normal wear and tear are typically excluded and need separate coverage or maintenance.

What landlord insurance is

Many landlord policies are based on "dwelling fire" forms, often labeled DP-1, DP-2 or DP-3, rather than the HO forms used for owner-occupied homes. The names and details vary by insurer and state, and some insurers sell packages simply called landlord or rental dwelling insurance. The basic idea is the same: you insure a building that you own but do not live in, and your interests as its owner.

If you own your home and also live in it, you probably have an HO-3 or similar form. Our homeowners insurance guide explains that. When you move out and rent the home, or buy a property to rent, the risk changes, and so does the type of policy an insurer will usually write.

What landlord insurance typically covers

CoverageWhat it does
DwellingPays to repair or rebuild the rental building after a covered loss such as fire or a windstorm
Other structuresCovers detached garages, sheds and fences on the property
Your personal propertyCovers items you own and keep at the rental, such as appliances, lawn equipment or furniture in a furnished unit
Loss of rent (fair rental value)Pays some lost rental income while the property is unlivable after a covered loss, usually with limits
LiabilityHelps with legal defense and damages if someone is injured on the property and you are found responsible
Medical paymentsCovers small medical bills for injured visitors, regardless of fault, on some forms

Details differ. For example, loss of rental income may be built into some forms or need to be added on others, so check your declarations page. The NAIC describes landlord or dwelling fire insurance as covering the house itself, other structures on the property, the owner's possessions, lost rental income if the house becomes uninhabitable and some liability protection.

What it does not cover

  • Tenants' belongings. The NAIC and state regulators say neither the landlord's nor the property manager's insurance covers a tenant's personal items. This is why landlords often require renters insurance in the lease. See our renters insurance guide.
  • Flood. Needs a separate policy. FEMA's National Flood Insurance Program offers building coverage for residential properties, and non-residential limits apply differently. See flood insurance explained.
  • Earthquake and earth movement, unless added.
  • Wear and tear, neglect and deferred maintenance. See the logic in our articles on roof damage and water damage.
  • Intentional damage and some tenant-caused damage. Policies treat vandalism, malicious mischief and tenant damage differently. Ask how your policy handles them, since a security deposit may be your first line of recovery.
  • Your business liability beyond the policy limits. If you own multiple rentals, you may need higher limits or an umbrella.

Why a homeowners policy usually is not enough

People sometimes keep their old homeowners policy after moving out and renting the house. That is risky. Insurers price homeowners policies for owner-occupants, and many contain conditions about occupancy. A vacancy or tenant-occupied situation may trigger limits or let the insurer refuse a claim, and the policy might not include loss of rent. If you plan to rent out a home you own, talk to your insurer or agent before the tenant moves in, and ask what they require.

Watch out: Short-term rentals through home-sharing platforms are a separate issue. The NAIC says most homeowners or dwelling policies are not designed to cover accidents arising from short-term rentals, and insurers may deny coverage even if the policy does not mention rentals. Check your coverage and any protection offered by the booking platform before you list a property.

Choosing coverage and limits

  1. Insure the rebuilding cost. Base the dwelling limit on what it would cost to rebuild the structure, not what you paid or its market value. See how much homeowners insurance you need for the method, which applies similarly here.
  2. Check how losses are valued. Replacement cost and actual cash value can produce very different payments. Our article on replacement cost vs. actual cash value explains the difference.
  3. Review loss of rent. Ask how it is calculated, whether it has a time limit, and whether it applies while a covered loss is being repaired.
  4. Set your liability limit with care. Landlords can face claims from tenants and guests. Consider the value of your assets and whether to add an umbrella policy. Our umbrella insurance guide explains how excess liability works.
  5. Look at the deductible. A higher deductible may lower your premium but increases your out-of-pocket cost per claim.
  6. Check endorsements. Options may include equipment breakdown, ordinance or law, water backup or vandalism coverage. Availability varies.
  7. Compare quotes from several insurers. Landlord policies are written by many companies, and terms differ.

Practical steps for landlords

  • Require tenants to carry renters insurance, and ask for proof of coverage at lease signing. Rules for what a lease can require vary by state.
  • Consider being named on your tenant's renters policy as an interested party so you get notice if it lapses. Ask the tenant's insurer what is possible.
  • Keep records: photos at move-in and move-out, inspection reports, maintenance receipts and repairs.
  • Maintain the property. Insurers can deny claims for damage caused by neglect.
  • Tell your insurer about changes, such as a new tenant type, a vacancy or renovations.
  • If you use an LLC to hold property, talk to an attorney and insurer about how coverage should be written. We do not give legal advice.

Frequently asked questions

Does landlord insurance cover my tenant's belongings?

No. Tenants need their own renters insurance for their belongings and personal liability.

Can I use homeowners insurance on a rental house?

Usually not once the home is tenant-occupied. Insurers generally require a landlord or dwelling policy, and a homeowners policy may not respond properly. Ask your insurer before you rent the property.

Does landlord insurance cover lost rent?

Many policies offer coverage for lost rental income when a covered loss makes the property unlivable, usually with limits. Check whether it is included or optional.

Does it cover damage caused by tenants?

It depends on the policy and the type of damage. Some intentional or malicious damage is treated differently, and security deposits can matter. Ask your insurer for the specifics.

What about Airbnb-style short-term rentals?

Standard landlord and homeowners policies often are not designed for short-term rentals. The NAIC advises checking with your insurer and the booking platform before you list a property.

Sources

General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.