How Much Does Landlord Insurance Cost?

Landlord insurance costs about 25% more than a standard home insurance policy. This insurance is a must-have for anyone with rental property because it usually covers:

Damage to your property and other structures
Legal fees if someone sues you
Items used to service the property (such as lawnmowers)
Lost rent if tenants have to move out due to damage

So if a big storm damages your rental's roof or a tenant gets injured and you’re found liable, landlord insurance can help pay for these problems. Keep reading to learn how much landlord insurance typically costs.

Key takeaways

Landlord insurance typically costs about 25% more than standard homeowners insurance, on average around $3,251 per year.
Oklahoma has some of the highest landlord insurance rates, while Hawaii has the lowest.
The type of landlord policy you purchase (DP1, DP2, or DP3) will also influence the cost. Each type has a different coverage level.
Factors like property location, age, coverage limits, and additional features can all affect your insurance rates.
You can lower landlord insurance policy costs through discounts, increasing your deductible, maintaining your property, and reviewing your policy annually.

How much is landlord insurance?

On average, landlord insurance rates are roughly 25% higher than standard home insurance rates. If the average home insurance policy is $2,601 per year, based on Insurance.com’s analysis, landlord insurance is around $3,251 per year.

However, the average cost of landlord insurance can vary a lot depending on where your rental property is located. Some states have much higher costs. For example:

Oklahoma: The average home insurance policy is $5,858 per year, so insurance for landlords might be $7,323.
Florida: The average home insurance rate is $4,419 per year, so typical landlord insurance costs could be around $5,524.
Colorado: Home insurance costs $4,099 per year on average, so the cost of landlord insurance might be roughly $5,124.

Other states have much lower costs:

Hawaii: Home insurance costs around $613 per year, so costs for landlord insurance might be around $766 per year
New Hampshire: The average home insurance cost is $1,221 per year, so average landlord insurance costs could be roughly $1,526.
California: The average home insurance policy is $1,405 per year, so typical landlord insurance rates could be roughly $1,756 per year.

The cost of the different types of landlord insurance coverage

The cost of landlord insurance will also depend on the type of policy you purchase. There are three main options: DP1, DP2, and DP3. Each has a different price point and level of protection.

DP1 Policy (Basic Form)

DP1 policies are usually the least expensive form of landlord insurance. They provide dwelling coverage only for named perils like fire, lightning, and internal explosions. These policies pay claims on an actual cash value (ACV) basis by default, but you may have the option to upgrade to replacement cost coverage.

DP1 policies are generally best for landlords who want minimal coverage or have older properties. They typically do not include landlord liability insurance or loss-of-rent coverage, although some insurers may offer these as add-ons.

DP2 Policy (Broad Form)

A DP2 policy is a mid-range option that covers more perils than DP-1, including vandalism and falling objects. It's usually more expensive than DP-1 but less than DP-3. These policies usually cover liability and loss-of-rent coverage.

DP3 Policy (Special Form)

A DP3 policy is the most comprehensive and usually the most expensive option. It covers all perils and events except those specifically excluded. Some common exclusions are neglect, intentional loss, water damage from non-covered perils, mold, rust, and rot. Similar to DP2 policies, you’ll typically get liability coverage and reimbursements for lost rental income.

What factors determine the average cost of landlord insurance?

Although the type of policy you choose can influence your landlord insurance costs, these factors can also affect how much you pay:

Property location. Where your rental property is located plays a big role in insurance costs. Areas prone to natural disasters like hurricanes, floods, or earthquakes typically have higher premiums. Urban areas with higher crime rates may also see increased costs.
Property type and age. Single-family homes, multi-unit buildings, and apartments each have different risk profiles. Older properties might be more expensive to insure due to potential maintenance issues.
Coverage limits and deductibles. The amount of landlord insurance coverage you choose and your deductible directly impact your premium. Higher coverage limits can lead to higher premiums, while higher deductibles can lower premiums.
Property location. Areas prone to natural disasters or high crime rates typically have higher premiums.
Rental income coverage. Your premiums may increase if you opt for coverage that reimburses lost rental income when no one is living in a property after a covered event.
Additional structures and features. Features like pools, hot tubs, or detached garages can increase insurance costs due to added liability risks or potential damage.
Theft risk. Areas with higher crime rates or a history of break-ins may pay higher premiums for landlord insurance.

Landlord insurance cost vs. homeowners insurance cost

Is landlord insurance more expensive than homeowners insurance? Yes, it is. This price difference is because rental properties inherently have more risks, including potential property damage caused by tenants, longer vacancy periods, and higher liability exposure.

On average, homeowners insurance costs around $2,601 a year. If landlord insurance is approximately 25% more for the same property, then the average cost of landlord insurance is about $3,251 annually.

Usually, you cannot use a standard homeowners policy for a rental property. If you do, it can lead to your claims being denied or your insurance being canceled. Regular home insurance is just for the home you own and live in.

This table highlights more differences:

Feature	Landlord Insurance	Homeowners Insurance
Average annual cost	$3,251	$2,601
Rental income coverage	Yes	No
Liability limits	Usually higher	Usually lower
Personal property coverage	Only for items used to service the rental	All personal belongings, up to policy limits
Occupancy assumption	Non-owner occupied	Owner occupied
Premium tax deductibility	Usually deductible as a business expense	Not typically deductible

What are some common landlord insurance discounts?

Discounts are another good way to lower the cost of landlord insurance. Depending on your insurer, you may have these discounts available to you:

Multi-policy discount. If you bundle your landlord insurance with other policies (like homeowners or auto insurance) from the same company, you could save money. This is often one of the easiest discounts to qualify for.
Safety feature discount. Installing safety devices like smoke detectors, security systems, or fire sprinklers in your rental can often lead to discounts. These features help reduce your risk of filing a claim, so some insurers will reward you for it.
Claims-free discount. Many insurers reward landlords who haven't filed a claim in recent years. Usually, you have to be claims-free for three to five years for this landlord insurance discount.
Loyalty discount. Staying with the same insurance company for several years can sometimes earn you a discount. The longer you stay, the more you might save.
New property discount. Some insurers provide discounts if your rental property is newly built or you’ve recently renovated. Insurers often view newer properties as lower risk because they have updated systems and structures.

Tips for lowering landlord insurance rates

There are other ways to keep landlord insurance costs low beyond just asking for discounts. Some of these tips can directly reduce your rate, while others help prevent claims that could increase future premiums:

Increase your deductible. You could raise your deductible — the amount you pay before insurance kicks in. A higher deductible will usually lower premiums. However, choosing an amount you can comfortably afford is critical if you file a claim. So proceed with caution.
Keep your property in good shape. Perform regular maintenance on plumbing, electrical and roofing. Updating these core items could reduce your chances of damage or filing a claim.
Give your policy a yearly check-up. This check-up is twofold. First, it allows you to review your policy to check if you’re over- or under-insured. Plus, it allows you to shop around and see if another insurance broker can give you a better rate on landlord insurance.

Landlord insurance price comparison

A landlord insurance price comparison can help you find the best policy for your needs. Here’s how to get an estimate:

Gather information about your property (location, size, age, features).
Determine the coverage types and limits you need.
Use online quote tools to find the best price for landlord insurance for your property.
Contact insurance agents directly for personalized landlord insurance estimates.

Remember that a landlord insurance cost estimate is just a starting point. Your actual costs may vary based on a detailed assessment of your property and needs.

Still have questions?

Still wondering how much landlord insurance costs per month? We’ve answered these frequently asked questions.

Is my rental property covered by my homeowner's insurance policy?

No, a standard homeowner's insurance policy usually doesn't cover the real estate you rent out to others. If you have rental property, you need landlord insurance. Rental insurance protects your property, liability, and loss of rental income after a covered event.

How much is most renters insurance?

Renters insurance typically costs around $18 per month or $216 per year, according to a Value Penguin study. This is much cheaper than landlord insurance because it only covers the tenant's personal belongings and liability, not the building itself. Renters insurance rates can be as high as $29 per month in states like Alabama and as cheap as $12 in states like New Hampshire.

Which state has the highest landlord insurance cost?

Based on recent data, Oklahoma has some of the highest home insurance rates in the country, so its landlord insurance might be the highest too. For reference, the average home insurance policy in Oklahoma is $5,858 per year. If Landlord insurance is 25% more, rates could be approximately $7,323 annually.

Which state has the lowest landlord insurance cost?

Hawaii typically has the lowest landlord insurance cost, on average, at about $766 per year. This is likely due to lower risks of natural disasters and favorable state regulations. Other states with low average costs include New Hampshire (around $1,526 per year) and Vermont (about $1,579 per year).

Can the cost of landlord insurance be deducted from taxes?

The Internal Revenue Service (IRS) allows you to deduct any rental property expenses from your rental income, including landlord insurance premiums. Keep records of all your rental property expenses, and speak to a tax professional if you have questions.

What is the typical landlord liability insurance cost?

Landlord liability insurance costs are usually included in your landlord property insurance costs. While it's not typically priced separately, it can greatly impact your total premium. Higher liability limits will increase your overall insurance costs but provide better protection against potential lawsuits.

How much is landlord insurance per month?

On average, landlord insurance costs per month are around $270. However, this can vary depending on your property location, coverage limits, and the type of policy you choose. Some landlords may pay as little as $64 per month in states with lower insurance costs, while others in high-risk areas could pay over $600 per month.

How much should landlord insurance cost?

How much landlord insurance should cost depends on various factors, but generally, you should expect to pay about 25% more than a standard homeowners policy for the same property. The average cost is around $3,251 annually, but your actual cost may be higher or lower based on specific circumstances. You can estimate landlord insurance costs for your property by grabbing price comparison quotes online.

Why is landlord insurance more expensive?

Landlord insurance costs more per month because rental properties have more risks. Tenants might damage the property or get hurt, leading to lawsuits. Empty periods between renters can also cause issues. Plus, landlords need extra coverage for lost rent and liability.