Landlord Insurance Cost 2022: Details and Coverage

Landlord Insurance Cost: Details and Coverage

How much does landlord insurance cost? Landlord insurance doesn’t have a set price, but on average it can be around $1,300 annually. Your true cost of landlord insurance all depends on a wide range of factors, however. Read on for more details.

No matter what you consider as an investment venture – may it be leasing or renting out your unoccupied house, you should consider buying insurance protection. However, you should also have in mind that the higher you spend on your insurance, the lower the profit you’ll gain. 

As a landlord, earning less than what you’re supposed to have is not your cup of tea. But things don’t have to be this way since many representative and underwriters will help you shop and compare numerous landlord insurance policies and prices from different insurance providers. 

With their professional guidance and assistance, you can avail of the appropriate home insurance coverage for your own set of needs at the most affordable cost. There is no need to struggle with the dilemma between landlord insurance and your profit. 

Now, you will spend less money on insurance and earn more income from your investment venture – it’s that easy. But before you get overwhelmed with all ins and outs of policies, here’s a brief introduction on how insurance companies calculate the landlord insurance costs and prices of certain policies.

Landlord Insurance Calculator

Insurance companies consider many risk factors when it comes to estimating homeowner’s insurance, such as the location and size of your rental property and the affiliated expenses for replacement or repair. After that, they add all the aspects according to your unique set of needs, add a dash of profit margin, and there, you’ve earned yourself a quoted premium that is specifically curated for you. 

It would help if you also took note that, for the most part, the landlord insurance rates will be consistent until the lifespan of your landlord policy. However, several things could change it, such as upgrades to the value of your property, filing a claim, or during the case that the financial demands of your plan dramatically escalate and trigger the insurer to increase it.

Many factors impact the quote of your landlord insurance policy. Generally, when an insurer preps your policy, here are the things that they are considering:

  • Dates and costs of purchase for all your rental properties
  • Underlying or present property insurance policies and any claim history records
  • Locations of every rental property you own; some places in the country are more costly to insure compared to others
  • Improvements, upgrades, and renovations are carried out to the properties, even those that are made by renters – built-in shelves, additional rooms, etc.
  • Square footage of every unit
  • Safety equipment and tools installed on the premises of the property – motion sensors, burglar alarms, trained guard dog, or fire sprinkler systems
For example, landlord insurance in Florida may cost about $2,300 per year which would be different from landlord insurance in NJ.

How Much Does It Cost to Insure a Rental Property?

The average home insurance costs $1,000 per year. The average premiums, on the other hand, range from $600 up to $2,300. 

Typically, landlord insurance costs more than other forms of coverage since it has greater liability and bigger structures. Expect that you’ll pay 20% more for landlord insurance per year than you would for homeowners insurance. This means that landlord insurance will cost about $1,300 for a year.

Unfortunately, landlord insurance doesn’t have an average price. Prices fluctuate dramatically based on several factors. It also varies according to the state, country, city, and even block that the property is situated. Apart from this, the price also varies according to the different kinds of rental properties that you have. These include:

  • Single-family home
  • Condo unit
  • Multi-family three to four-unit house
  • Two family home
  • Retail
  • Industrial
  • Office
  • Apartment building (five-plus rentals)

A beautiful house with a large white porch.

How Much Insurance Do I Need for My House?

When you have the right insurance in place, you can protect yourself from major financial losses that could damage your real estate career. It is essential that you find the sweet spot between being cash-poor and insurance-rich. 

You want to guarantee that the amount of money you are paying for insurance premiums alone will not wreak havoc on you and your business. It pays to work with a reputable insurance company to meet your present situation and needs. Here are tips for different kinds of landlord insurance that will suit your rental property.

  1. Liability insurance – you can buy liability coverage to protect the physical property of your rental unit, as well as your actual business.
  2. Hazard and fire insurance – this will protect you in the case that your rental property is damaged by fire and other unforeseen accidents.
  3. Sewer backup insurance – this additional policy can be added to your underlying hazard and fire insurance policy at an affordable price.
  4. Flood insurance – this is mostly beneficial for rental properties that are located in a designated flood zone area. Also, even if your property is not situated in a designated flood zone area, but you are worried that extreme flooding might damage your property, you can buy flood insurance.

What Does Landlord Insurance Cover?

Being a landlord is an incredible way to earn a generous amount of passive income; however, it can also be extremely expensive when things go out of your control. Since you are allowing strangers to live on your property, you are exposing yourself to various risks. 

Aside from your tenants, it would help to watch out for vandalism and natural disasters that can potentially damage your property. All in all, being a landlord is a challenging job that you should take seriously if you want to succeed in real estate.

Of course, you don’t have to do all the work on your own. If you are planning to protect your personal property and yourself from possible risks and damages, landlord insurance is a great option. You can talk to an independent representative or underwriter, and ask for their professional help and expertise. They are well-versed with the ins and outs of landlord insurance and liability protection and they will walk you through the entire process. 

One thing that you should pay attention to is the home insurance coverage amounts that you need. Your insurance representative will help you choose the best and most appropriate homeowners’ coverage that you need to protect your property. 

The following tips include different types of coverage that you should consider:

  • Liability coverage – this will secure you in the case someone damages or harms your property. It can be a tenant or guest.
  • Property damage – this will secure your homes from buildings, sheds, pools, gym, lounge area, and other structures, including your fixtures and equipment.
  • Workers’ compensation – this will safeguard you and your maintenance staff in case someone is injured while on the job or has suffered from a medical condition caused by their line of work.
  • Loss of income – this will guard your finances and will reimburse you in case your property is unlivable for a certain period.
  • Natural disasters – this will provide coverage against unforeseen harsh weather conditions like floods or earthquakes.
  • Legal fee coverage – this will guard you in case your tenants try to sue you. It will cover your legal fees and other expenses because protecting yourself in court isn’t cheap.

Do I Need Landlord Insurance and Homeowners Insurance?

Landlord insurance works by securing property owners and their properties. In the case that your property gets damaged by accidents, theft, natural disasters, and other risks, your insurance company will cover all the expenses until you can operate on your own again. It will help you get back on your feet during unforeseen property damages that could lead to financial downfall. 

You might be thinking that you still don’t need that insurance because your tenants are good people and they aren’t capable of suing you or damaging your property. However, it pays to be ready for unpredictable circumstances. At this point, anyone can sue you for anything – even your renters. Talk to your insurance representative to get the best insurance for landlords for you.

How Much Dwelling Insurance Do I Need?

Dwelling Insurance in your homeowners insurance policy covers the costs of replacing the actual structure of your home. You can determine the amount of dwelling coverage you need by calculating the cost of rebuilding your home and any attached structures such as the front porch, plumbing, roof, in-ground swimming pool, or garage.

Dwelling insurance is most likely the highest coverage limit in your homeowners insurance policy as it pays for rebuilding your entire home using current construction, materials, and labor costs. 

How to Calculate Dwelling Coverage

To calculate a quick estimate, call your local home construction company or a real estate representative to find out the current costs of rebuilding a home and multiply that number by the square footage of your home.

Remember that, even with the best estimate of coverage costs, your dwelling coverage limit may still not be enough if you file a claim to rebuild your home. To avoid this, consider adding extended replacement cost coverage to your existing landlord insurance policy that will pay you an additional amount (usually 25% or 50% of your dwelling limit) toward rebuilding costs. 

And if you are interested in discovering more about insuring your commercial property, read about how East Insurance Company makes insurance easier!