What is landlord insurance and why does it matter for property managers?

When you’re managing rental properties—whether it’s one unit or an entire portfolio—insurance isn’t just a box to check. It’s a safety net that protects property owners from the financial fallout of accidents, damage, or legal claims. And for rental properties, landlord insurance is the right tool for the job.

Unlike homeowners insurance, landlord insurance is designed for properties that generate rental income. If your client is renting out a unit, standard homeowners coverage likely isn’t enough—and that’s where landlord insurance comes in.

In this post, we’ll break down what landlord insurance covers, how it’s different from other policies, and what property managers should know about helping owners stay protected.

What Is Landlord Insurance?

Landlord insurance is a type of property insurance that covers residential rental properties. It’s designed to protect landlords from financial loss related to:

• Property damage
• Liability claims
• Lost rental income due to covered events

Whether your client owns a single-family rental, a duplex, or a small apartment building, landlord insurance helps manage the unique risks that come with being a rental property owner.

This kind of policy typically does not cover the tenant’s personal belongings—that’s what renters insurance is for. Landlord insurance focuses on the structure, income, and liability tied to the property itself.

What Does Landlord Insurance Cover?

Coverage can vary by provider, but most landlord insurance policies include the following:

1. Property Damage

Covers the cost to repair or rebuild the physical structure of the rental property if it’s damaged by:

• Fire
• Lightning
• Wind or hail
• Water damage (not related to flooding)
• Vandalism
• Some types of accidental damage

This may include not only the building itself but also other structures on the property like sheds, fences, or garages.

2. Liability Protection

Protects the landlord if someone is injured on the property and the landlord is found legally responsible. Liability coverage typically includes:

• Medical bills for injured guests or visitors
• Legal fees if the landlord is sued
• Settlements or court-awarded damages

For example, if a tenant slips on an icy walkway and breaks their arm, liability insurance can help cover those costs.

3. Loss of Rental Income

If a covered event (like a fire) makes the property uninhabitable, landlord insurance can reimburse lost rental income while repairs are being made. This is often called loss of use or fair rental value coverage.

• Some policies may also include or offer optional coverage for:
• Equipment breakdown (like HVAC systems)
• Tenant default (missed rent)
• Legal costs from eviction proceedings
• Personal property (appliances, furnishings in furnished units)

What’s Not Covered by Landlord Insurance?

While landlord insurance offers robust protection, it doesn’t cover everything. Common exclusions include:

• Tenant belongings: these must be covered by a separate renters insurance policy
• Flood damage: typically requires a separate flood insurance policy
• Earthquake damage: may also require an add-on or separate policy
• Normal wear and tear: general maintenance and upkeep aren’t covered
• Negligence-related issues:  if the landlord failed to maintain the property, the insurer may deny a claim

As a property manager, it’s important to help owners understand these gaps and suggest add-ons or additional policies if needed.

How Is Landlord Insurance Different from Homeowners Insurance?

This is a key distinction many first-time landlords—and some property managers—get wrong. Homeowners insurance is not designed for rental properties. It covers owner-occupied residences, not homes used to generate rental income.

Here’s how they compare:

Why Should Property Managers Care?

Even if you’re not the one purchasing the insurance, landlord coverage affects your job in several ways:

1. You’re often the first point of contact when something goes wrong.

If a tree falls on the roof or a pipe bursts, the tenant is calling you—not the property owner. Knowing what’s covered and what isn’t helps you set expectations and act quickly.

2. You can help prevent gaps in coverage.

New landlords might not realize that homeowners insurance won’t protect them in a rental situation. Property managers can offer valuable guidance—or even recommend insurance providers.

3. You’re better positioned to coordinate claims and repairs.

Many property management agreements include coordinating with vendors, insurers, and adjusters during a claim. Understanding landlord insurance gives you an edge in navigating these processes smoothly.

What About Required Coverage for Tenants?

While landlord insurance protects the property owner, it’s smart to require renters insurance for tenants. This helps:

• Protect tenant belongings
• Reduce liability disputes
• Speed up damage resolution
• Lower the risk of legal complications

Many property managers include renters insurance requirements in the lease and offer policies that tenants can purchase through the Resident Center or another platform.

Frequently Asked Questions

Is landlord insurance required by law?

No—but if there’s a mortgage on the property, the lender will usually require it. Even for paid-off properties, it’s highly recommended to mitigate risk.

Does landlord insurance cover appliances?

Sometimes. Some policies include coverage for landlord-owned appliances (like stoves or refrigerators), but it’s important to check for limits or exclusions.

Can landlord insurance cover multiple properties?

Yes. Some insurers offer landlord portfolio policies that cover multiple units or buildings under a single plan—often with volume-based discounts.

How much does landlord insurance cost?

It varies by location, property type, coverage level, and risk factors, but a common range is 15–25% more than homeowners insurance for a similar property.

What if the property is vacant?

Standard landlord policies often include a vacancy clause—limiting coverage if the property is empty for a certain number of days (usually 30+). If your property is vacant long-term, you may need vacant property insurance.