Landlord Insurance: A 2025 Guide

By Mark Fitzpatrick

Updated: August 29, 2025

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Key Takeaways

Landlord insurance protects rental property owners from liability claims, property damage and lost rental income.

It covers property damage and liability claims, but doesn't cover tenant belongings or vacancy periods.

Your coverage needs depend on property value, net worth, location risk and tenant type.

What is Landlord Insurance?

Landlord insurance is specialized coverage that protects rental property owners from risks regular homeowners insurance won't touch. That includes property damage, liability claims and lost rent when tenants can't live in your unit. With 19.3 million rental properties nationwide, according to Congressional Research Service data, plenty of property owners need this protection.

You can buy landlord insurance as its own policy or add rental coverage to your existing insurance. Most insurers will want details about your property, rental income and tenants before quoting you rates and coverage options.

Landlord Insurance: Policy Types

Landlord insurance comes in three main forms, each with different levels of protection for your rental property. These differences matter when you're choosing coverage that fits your situation and budget.


Coverage Level	Named perils only	All perils except exclusions	All risks except exclusions
What's Covered	Fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft	Everything in DP-1 plus water damage from burst pipes, falling objects, weight of ice/snow	Covers most risks unless specifically excluded
Cost	Lowest premium	Mid-range premium	Highest premium
Property Eligibility	Basic rental properties, older buildings	Most single and multi-family rentals	Higher-value properties, newer construction
Loss of Rent Coverage	Available with limits	Available with extended limits	Available with highest limits
Deductible Options	Limited options, higher minimums	Standard options, flexible amounts	Full range of options, lowest minimums available
Endorsement Availability	Few add-on options	Moderate add-on options	Extensive add-on and upgrade options
Best For	Budget-conscious landlords	Balanced protection seekers	Maximum protection needs

Disclaimer

Every insurance company handles these policies differently, and your state might have its own rules. What you see above gives you the big picture, but you'll want to talk with an insurance agent about your property to get the details.

LANDLORD INSURANCE POLICY TYPES AND CLAIM PAYOUTS

Your policy type choice determines how your landlord insurance pays claims. DP-3 policies typically include replacement cost coverage, which means paying what it costs to rebuild or repair today. DP-1 and DP-2 policies usually use actual cash value, which factors in depreciation.

For example, if your rental property's 15-year-old roof gets damaged, replacement cost pays for a brand-new roof, but actual cash value only covers what that old roof was worth. This difference explains why DP-3 policies cost more upfront but provide better financial protection.

What Does Landlord Insurance Cover?

Your landlord insurance won't cover everything that happens at your rental property. Some situations get full protection while others leave you paying out of pocket. Let's look at real situations and whether you're covered:


Storm damage brings down a tree onto your rental building.	✅	During a severe storm, Maria's large oak tree crashed through her duplex roof, causing $28,000 in structural damage that her DP-2 policy covered completely.
Flooding from a nearby river damages your rental property.	❌	When the nearby river flooded Tom's rental house with two feet of water, his standard landlord policy denied the $22,000 claim because he didn't carry separate flood insurance.
Your tenant slips on icy steps and sues for medical expenses.	✅	After tenant Jennifer broke her ankle on Dave's icy rental steps, his landlord insurance liability coverage paid her $12,000 medical bill and $8,000 legal defense costs.
Your tenant stops paying rent and abandons the property.	❌	When Sarah's tenant moved out without notice owing three months of rent ($4,200), her landlord policy provided no reimbursement because tenant default isn't a covered peril.
Vandals break windows and spray-paint your rental unit.	✅	Local vandals caused $2,800 in damage, breaking windows and spray-painting Lisa's rental exterior, which her DP-3 policy covered under vandalism protection.
Someone breaks into your tenant's apartment and steals their belongings.	❌	When burglars stole Mike's tenant's electronics and jewelry worth $6,500, his landlord policy didn't cover the loss because tenant belongings aren't his insured property.
A burst pipe floods the rental unit and tenants can't live there for two months.	✅	James collected $3,200 in lost rental income from his insurer after a burst pipe flooded his unit, forcing tenants out during repair work.
An earthquake damages your rental property's foundation.	❌	A moderate earthquake cracked Robert's rental foundation, requiring $18,000 in repairs that his standard policy excluded because it doesn't cover seismic damage.
Your tenant's kitchen fire spreads and damages the building structure.	✅	When Amy's tenant's cooking fire spread to the kitchen walls and cabinets, her insurer paid $14,500 to restore the structural damage.
Your property management company embezzles rent payments.	❌	After discovering his property manager had stolen $8,000 in rent payments over four months, Carlos learned his landlord policy doesn't cover management company theft.

How Much Landlord Insurance Do I Need?

Every landlord needs enough coverage to protect their rental property investment and personal assets. If you rent out commercial space, you face even more liability risk, making the right landlord insurance policy limits crucial.

Your coverage needs depend on:

1
Property Value
Your coverage should match what it costs to rebuild today, not what you paid for the property. Update your landlord insurance policy limits every year since construction costs keep climbing.
2
Net Worth Protection
If you own more than your liability coverage protects, consider umbrella insurance. You want enough coverage to protect everything you've built.
3
Property Type
Commercial rentals require business income coverage and higher liability limits because tenant businesses and their customers come and go.
4
Location Risk
In disaster-prone areas, expect higher deductibles, and you might need extra coverage for things like floods or earthquakes.
5
Tenant Requirements
Make your tenants carry renters insurance with at least $100,000 liability coverage and have them add you as additional insured.

Landlord Insurance Policy: Bottom Line

Landlord insurance is specifically for rental properties, covering risks that your regular homeowners insurance won't. You'll get protection for property damage and liability claims, but your tenants need their own renters insurance for their belongings. When shopping for coverage, focus on your property's value, your personal assets and the unique risks of your location and tenant type.

Commercial Landlord Insurance: FAQ

We tackled the most frequently asked questions property owners ask about landlord insurance when protecting their rental investments:

Do I need landlord insurance?

You don't legally have to buy landlord insurance, but it's essential for protecting your rental property investment. Your mortgage lender will likely require coverage, and without it, you're personally on the hook for property damage and tenant lawsuits that could cost thousands.

Are landlord insurance and homeowners insurance the same?

Homeowners insurance covers your primary residence and personal belongings, while landlord insurance protects rental properties but doesn't cover your tenant's stuff. Landlord insurance covers loss of rental income coverage and higher liability limits that regular homeowners policies don't offer.

How much does landlord insurance cost?

Your costs depend on property value, location and which coverage type you choose. DP-1 policies cost the least, while DP-3 policies run more but give you broader protection. Commercial properties need higher limits than residential rentals, so expect to pay more.

How do I get a landlord insurance quote?

Call insurance companies or independent agents with your property details, rental income and tenant information ready. Most insurers will want these details before giving you quotes. Compare DP-1, DP-2 and DP-3 options to find what fits your budget.

What does DP-3 landlord insurance cover?

DP-3 policies cover everything except what's specifically excluded, as well as replacement cost coverage that pays what it costs to rebuild today rather than your property's depreciated value. You get the most comprehensive protection with many add-on options and the lowest deductibles available.

Does landlord insurance cover tenant damage?

Your policy covers structural damage caused by your tenants, like kitchen fires that spread to walls and cabinets. But it won't cover their belongings, unpaid rent or normal wear and tear damage.

What is multi-property landlord insurance?

Multi-property coverage lets you insure several rental properties under one master policy, often saving you money through bulk discounts and making management easier.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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sources

Congressional Research Service. "Ownership of the U.S. Rental Housing Stock by Investor Type: In Brief." Accessed August 23, 2025.

Landlord Insurance