Landlord Insurance

For people who own their pads, there’s homeowners or condo insurance to protect themselves and their homes against the unexpected. Renters, for their part, can achieve peace of mind by purchasing renters insurance.

But those policies only apply to people who actually live in the property they’re insuring. What about people who own property but rent it out? Fortunately, there’s yet another type of home insurance: landlord insurance.

What is landlord insurance?

Landlord insurance is a policy that covers property owners renting out their homes, condos, or apartments.

Why is landlord insurance needed?

Sometimes, first-time landlords assume their standard homeowners insurance will still be suitable once they start renting out their home — but this isn’t necessarily the case.

Homeowners insurance is intended to cover owner-occupied homes. That means when you’re renting out your home to someone else, this coverage may no longer be suitable. That’s where rental property insurance, aka landlord insurance, comes in!

Whether you need a landlord policy or homeowners insurance policy typically depends on whether or not you will be living there, and how often you plan on renting out your place.  

For instance, if you’re only renting out a room within your home but you’re still living there, or if you’re only renting out your place occasionally — a homeowners policy might be enough.

However, if you intend to rent it out regularly, you’ll likely to need a landlord policy. It’s definitely worth checking with your insurance company if you plan to rent your apartment on a regular basis.

What does landlord insurance cover?

Landlord insurance coverage comes with four basic levels of protection:

  • Dwelling Coverage: Landlord insurance will cover you for the cost to repair or rebuild your home. This covers damage to your home from things like vandalism, riots, fires, lightning, and windstorms. It also covers structures such as sheds and garages.
  • Property Damage: If you’ve decked out your rental property with state-of-the-art furniture, you’ll want to make sure it’s protected. This part of your coverage will protect you in the event of damage to your personal property due to things like fire, burst pipes, or burglary.
  • Loss of Use (or loss of rental income): Let’s say your rental property becomes completely unlivable after a fire and you can no longer rent it out while the place is being repaired. Your insurance company will offer you temporary rental reimbursement to cover the financial loss you’ll miss out on while your property is being repaired/rebuilt.
  • Liability protection: This part of your landlord policy will protect you against liability claims and potential lawsuits you may be responsible for as the owner of the home. If a guest or a tenant is injured on your rental property because of something you’re legally responsible for, this coverage will help cover the costs for bodily injury claims, including medical costs or legal fees.

Btw, your liability protection will also cover you if you’re found responsible for another person’s property damage. For instance, if your leaking pipe causes damage to your neighbor’s property, your landlord insurance may have your back.

Extra landlord insurance coverage to consider

If you’re renting out a property you own, you can enhance your landlord insurance coverage with a few different add-ons.

For instance, condo landlords insured with Lemonade can purchase Equipment Breakdown Coverage (EBC) for a small monthly fee. EBC comes with a flat $500 deductible. It covers things like landlord-owned appliances and electronics against occurrences not covered by a standard insurance policy, including electrical failure or mechanical breakdown.

And while most insurance policies won’t cover water backup or earthquakes, Lemonade offers water backup as a landlord endorsement.

What’s not covered by landlord insurance?

While landlord insurance provides important protections for your structure, your furnishings and lost rental income, you’ll find certain things are excluded from your policy, including:

1. Equipment and maintenance breakdowns: If equipment like the AC or dishwasher breaks down, you’ll likely have to pay out-of-pocket for the repairs, and the same goes for any maintenance costs. If you purchase EBC, however, you’ll be able to file a claim for damages that wouldn’t be covered by your base policy.

2. Your tenants’ personal property: Rental house insurance won’t help cover your tenants’ personal possessions, such as clothing or electronics. For that, your tenants will have to purchase their own renters insurance policy. Some landlords require their renters to purchase renters insurance. Here’s how to convince your tenants to get renters insurance. Read this article if you need help convincing them.

3. Floods, earthquakes and water backup: Similar to most homeowners insurance policies, landlord insurance won’t automatically cover floods, earthquakes or water backups.

Coverage TypeIncluded with Standard Landlord Insurance Policy?
Property damageYes
Loss of useYes
Liability protectionYes
Flood InsuranceNo
Water backupNo

How much does landlord insurance cost?

Lemonade’s landlord insurance is available to owners of condos and apartments in CA, NY, IL, TX, PA, DC, NJ and starts at approximately $25.

The price of landlord insurance differs depending on your home size, location, and cost to repair or rebuild. The security measures you have in place, like burglar alarms, or motion sensors, may also influence the cost of your landlord insurance policy.

Generally, rental property insurance is slightly more expensive than a homeowners insurance policy. Think about it this way — if you’re making money on your rental property, that’s your business and you’ll want to take every measure to protect it.

How much renters insurance should a landlord require from their tenant?

Landlords know their tenants need renters insurance but exactly how much do they need? Renters insurance will come with its own set of coverage limits, for instance with Lemonade, Personal Property coverage starts at $10,000 and goes up until $100,000. Personal Liability coverage starts at $100,000 and goes up to $500,000. 

In the worst case scenario, how much would it cost to replace their personal belongings? If a tenant has some high-ticket personal items, like jewelry, bikes or cameras they may need to purchase some extra coverage. Renters should pick an amount based on their own personal circumstances. 

Please Note: These definitions don’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade. They are intended for educational purposes only - they’re not meant to be used in lieu of professional legal or financial advice. We’ll do our best to keep them updated, but they may not always reflect current industry developments. Feel free to use the terms with attribution (friends don’t let friends plagiarize!)

Property and casualty insurance provided by Lemonade Insurance Company, 5 Crosby St., 3rd floor, New York, NY 10013. Life Insurance provided by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193.

Lemonade Insurance Agency, LLC (LIA) is acting as the agent of Lemonade Insurance Company and Lemonade Life Insurance Agency, LLC (LLIA) is acting as the agent of North American Company for Life and Health Insurance®. Both LIA and LLIA receive compensation based on the premiums for the insurance policies each sells. Further information is available upon request.

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