Landlord Insurance in Massachusetts: What It Covers

Do you know there are over 10 Million landlords in the U.S., and a new rental unit is listed every 80 seconds? 

With more rental units, landlords often face growing challenges and responsibilities, such as finding the right tenants and maintaining property. 

What if your property is damaged by a storm or vandalized? As a landlord in Massachusetts, safeguarding your property and your financial investments is essential. That is where landlord insurance could help you provide the protection you need..

Unlike homeowners insurance, which is designed for owner-occupied residences, landlord insurance is specifically tailored to cover rental properties and the unique risks landlords face. 

Whether you own a single rental unit or a portfolio of properties, landlord insurance could help safeguard your assets and provide peace of mind.

This article will explain all you need to know about landlord insurance in Massachusetts, including how much it costs, what it covers, and tips to help lower your premium. 

Key takeaways

• Homeowners insurance typically doesn’t cover homes you don’t live in, so if you’re renting out a property, you should consider landlord insurance to protect your property interest.
• Landlord insurance in Massachusetts generally offers coverage for property damage, liability protection, and in some cases, lost rental income if a tenant is unable to pay rent. 
• While Landlord insurance is not legally required in Massachusetts, many property owners find it beneficial for added protection. 
• The cost of landlord insurance can vary depending on factors like location, property type, and the level of coverage selected.
• Property owners may be able to reduce their insurance premiums by implementing preventive measures and comparing rates for their specific needs.

Is landlord insurance required in Massachusetts?

While Massachusetts law doesn’t mandate landlord insurance, many property owners consider it, especially if their rental property has a mortgage. 

If you rely on home insurance for your rental property, chances are it can leave you vulnerable to major risks. This is because homeowners insurance in Massachusetts usually doesn’t cover rental-specific issues such as tenant-related damage or liability claims. 

Without landlord insurance, property owners could face out-of-pocket expenses for repairs, legal fees, or lost rental income.

Landlord insurance, also known as rental property insurance or DP-3 coverage, can offer protection for the property and could help manage potential financial risk.  

Having landlord insurance can demonstrate to tenants that you’re a responsible property owner, potentially enhancing your reputation and attracting reliable tenants..

So, is landlord insurance right for you? 

It may be a helpful option if you’re looking to protect your rental property from risks like tenant damage, natural disasters, or liability claims. Without coverage, you could potentially face significant out-of-pocket costs that may impact your finances.

How much is landlord insurance in Massachusetts?

The landlord insurance cost in Massachusetts can vary based on factors such as location, property size, and coverage options. On average, landlords can expect to pay $1,929 per year. 

To help you get a better understanding, here’s how costs may vary by location: 

Boston

Landlords in Boston can expect to pay higher premiums due to the city’s dense population, higher property values, and urban risks such as vandalism and theft. Since home insurance in Boston costs $1,650, and landlord insurance is about 25% higher, property owners can expect to pay around $2,062.

Worcester

In smaller cities like Worcester, landlord insurance is slightly more affordable and below the state’s average cost, i.e. $1,929 per year. This reflects the city’s more moderate property values.

Cape Cod

Properties in Cape Cod may have higher premiums due to the area’s exposure to severe weather risks, such as hurricanes. The annual insurance premium tends to be higher because insurance providers often account for the increased likelihood of claims.

Types of Massachusetts landlord insurance coverage

Landlord insurance in Massachusetts offers a range of coverage options designed to address the unique needs of your rental property and financial interests.

Different types of coverage are available to help manage various risks that landlords may encounter, providing a layer of protection for your investment. 

Without further ado, here are some of the main types of coverage you’ll find in many Massachusetts landlord insurance policies:

• Damage to the structure of your property

Dwelling coverage could help pay for repairs to the structure of your property, such as the floors, walls, and roof, if they’re damaged or destroyed by a covered event, like fire, wind, lightning, or smoke. 

This coverage also extends to storm damage. However, landlord insurance in Massachusetts typically doesn’t cover water damage caused by floods. To protect against flood-related risks, you may consider adding  flood insurance or obtaining a policy through the National Flood Insurance Program.

Make sure you have enough dwelling coverage to rebuild your property if needed.

• Damage to personal belongings

Rental property insurance in Massachusetts may also cover damage to personal items you keep in the rental property. However, this only applies to belongings owned by you – the policyholder – and not your tenants.

• Landlord liability coverage

Landlord liability coverage protects property owners in case of injuries or legal disputes. 

While medical liability coverage pays for medical expenses if someone gets hurt on your property, legal liability coverage could help cover legal fees if you need to take legal action against a tenant.

• Lost income

The rental income policy typically reimburses you for lost rent if your property becomes uninhabitable due to damage from a covered event. It may also help cover temporary housing costs for your tenants.

• Break-ins by third parties

If a person other than your renter breaks into your property, landlord insurance in Massachusetts typically covers the repair costs. You can also add theft insurance to most policies for added protection.

All landlord insurance coverage options we mentioned will have deductibles and limits based on your policy. While deductibles are the amount landlords pay out-of-pocket before the insurance kicks in, the limit is the maximum amount your policy will pay for a covered loss.

Each type of coverage usually has its own deductible and limit, and you may have the option to choose these amounts when setting up your policy.

Optional coverages to consider for your landlord policy

Depending on your rental location, condition, or neighborhood, you may want to add extra coverage to your landlord insurance.

Here are some options Bay Staters can consider:

• Vandalism: Standard landlord insurance in Massachusetts typically doesn’t cover vandalism unless you add this optional coverage. It could help pay for repairs to damage caused by vandalism to the building, other structures, or contents. However, vandalism that happens after the property has been vacant for 90 or more days is not typically covered.
• Burglary: Your traditional rental property insurance policy may cover damage to doors or windows during a break-in, provided it wasn’t vacant for 90 days. However, you can extend this protection with optional burglary endorsement. This landlord policy typically includes coverage for damage (any kind) caused by burglars illegally entering the building and damage to personal property.
• Rental property under construction: If you build a new property or renovate an existing one, you can add coverage to protect the structure while it’s under construction until it’s ready to be rented out.
• Building codes: When repairing or replacing parts of your rental after damage, you may need to meet updated building codes, such as improved wiring or ventilation. This optional coverage could help cover the additional costs required to meet these legal standards.

Reach out to your landlord insurance provider in Massachusetts to explore these optional coverages and see how they can help protect you as a property owner.

Massachusetts landlord insurance coverage exclusions

Rental property insurance in Massachusetts can help cover certain sudden and unexpected losses. However, the policy doesn’t cover everything. 

Here are some common Massachusetts landlord insurance coverage exclusions:

• Intentional or malicious damage by tenants 

If a tenant intentionally or maliciously damages your property, it’s not something your insurance will cover. These cases often require legal action, not an insurance claim.

• Tenants’ personal belongings 

A landlord policy doesn’t include coverage for your tenants’ personal property. That’s where renters insurance could help. You can require your tenants to have their own renters insurance as part of the lease agreement.

• General maintenance and appliance replacement 

Wear and tear can cause equipment to break. However, landlord insurance won’t typically cover the cost of replacing them. In Massachusetts, property owners are responsible for handling regular maintenance and replacement of appliances before they stop functioning.

• Shared property 

If you reside on the property and rent out a room or a separate floor, you may not qualify for landlord insurance. This is because DP-3 coverage is designed for non-owner-occupied properties. 

Instead, ask your insurance company or agent if you can add coverage to your homeowner's policy for the rental portion of your property.

How to lower your Massachusetts landlord insurance premium

Want to save money on your landlord insurance in Massachusetts? Here are some actionable workarounds which could help lower your annual premiums:

Check for discounts 

Many insurance carriers offer discounts that can lower your insurance premium. When you compare different providers, make sure to look for these savings options. 

Some potential discounts insurers in Massachusetts include:

• Bundling discounts. This is when you merge rental dwelling coverage with other policies.  
• Paying annually instead of month-to-month.
• Using eco-friendly materials or appliances.
• Getting a discount if a family member is already a customer.

Prepare your property for inspection 

Before your property gets inspected for an insurance quote, it’s better to fix any potential problems. This could help you get a lower premium. 

As a property owner in Massachusetts, you should replace old appliances and treat mold or rot. Also, check that your roof is in good condition (new roofs often lead to lower premiums). 

Storm-proof your property 

If your property is in an area at risk of storms, taking steps to prevent damage could lower your insurance rates. You can:

• Install reinforced windows and doors.
• Upgrade your roofing system.
• Add anti-flooding measures.

Raise your deductible 

As mentioned, your deductible is the out-of-pocket amount a landlord pays before insurance starts covering the rest. If you’re willing to pay a higher deductible, your monthly premium can be lower. 

However, this also means you’ll need to pay more if you make a claim.

Screen tenants carefully 

Good tenants are less likely to cause damage or disputes, which means fewer claims and lower insurance rates over time. While you may not see immediate savings, screening tenants could help lower your premiums in the long run.

Still have questions?

Curious to learn more about landlord insurance in Massachusetts? Here are some frequently asked questions:

Can a landlord require renters insurance in MA?

Yes, landlords in Massachusetts can require tenants to purchase renters insurance as a condition of their lease. This policy could help protect tenants’ personal belongings and can cover liability claims, reducing potential conflicts.

How much is renters insurance per month in MA?

Renters insurance premiums typically range from $15 to $30 per month. The exact cost depends on the location, size of the rental unit, and the value of the policyholder's belongings.

Is renters insurance higher than homeowners insurance in Massachusetts?

No, renters insurance is generally much cheaper than homeowners insurance in Massachusetts because it doesn’t cover the property's physical structure.

Who has the cheapest landlord insurance in Massachusetts?

The cheapest provider will depend on your property location and needs. Compare quotes from major insurers such as Allstate, State Farm, and Liberty Mutual to find the best deal.

What factors influence the price of landlord insurance in Massachusetts?

The cost of landlord insurance in Massachusetts can vary due to numerous factors such as the property’s location, age, and condition, as well as the level of coverage and the landlord’s claims history.