The Best Landlord Insurance Companies

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Contributor, Benzinga
September 27, 2023

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Rental properties fall in an unusual nexus between the worlds of business and real estate. While you may own the rental property and retain the deed to the space, you also exchange a certain amount of rights and freedoms when you decide to rent out your home. As a result, landlords have a number of liabilities and hazards that might not be covered by even the best homeowners insurance policies.

If you’re planning on renting out a home, do your due diligence to save yourself time, stress and money later down the line. We’ve created a crash-course on everything you need to know about landlord insurance as well as a guide to some of our favorite landlord insurance providers.

The Best Landlord Insurance

  • Best for Landlords: Obie
  • Best for Insuring Multiple Properties: Steadily

Insurance for commercial properties like rental houses, duplexes and apartment communities varies from standard homeowners insurance policies. Many providers that specialize in insuring these assets, taking into account each specific type of property’s landlord-tenant access and responsibilities. 

Below, you will find a few providers to research and find the best choice for your situation. While this list is not comprehensive, many of these companies can insure different types of properties and serve most parts of the country.

1. Best for Landlords: Obie

Chicago-based Obie serves all 50 states and insures more than $4 billion in properties across the country. Obie specializes in insurance for landlords and offers a fully online application process. Its commitment to ease of access for its customers and being on the cutting edge of technology allows the company to offer a quick quote process and low rates for its clients.

Getting started with Obie is easy, allowing you to get a quote after inputting some quick info on your phone or desktop. Enter details about yourself and your property to start comparing coverage and enroll in a policy. Offering coverage for single-family homes, apartment buildings and everything in between, Obie can provide a plan for almost any residential investment property 

Obie’s website also claims that people who switch to its insurance save 25% on average, so if you are already covered it might be worth getting a quote from Obie to see whether you can save more.

Pros

  • You can quickly get a quote with a few details about the property and the ownership structure
  • You can still cover single-family homes with these plans
  • You can also cover apartment buildings and complexes with Obie

Cons

  • Make sure you understand the difference between water damage inside the unit or property and a flood. You may want to purchase additional flood coverage

2. Best for Insuring Multiple Properties: Steadily

Like Obie, Steadily specializes in landlord insurance and is a nationwide provider. Its website touts Steadily as “the best-rated landlord insurance company in America'' with an average customer rating of 4.8 out of 5 stars. Covering single-family homes, multifamily structures, condos, apartment buildings and short-term rental properties such as Airbnb and VRBO, Steadily can insure almost any residential real estate investment.

One big perk of Steadily’s coverage is how customizable it is. The company offers umbrella insurance, which covers several areas of risk and allows you to pick what you would like covered from an extensive list. For example, you may be willing to pay more for fire and water damage coverage but don’t think hail and wind damage is worth the cost. Steadily allows you to choose which hazards to cover, customizing costs and protections on your plan. 

Pros

  • Steadily helps you adjust to meet the needs of your budget so that you can get covered without overextending
  • It’s easy to cover short-term rentals and other properties where you have frequent guests

Cons

  • While Steadily is customizable and covers many different types of properties, you may find that the unique hazards you face are not covered at the level you prefer
  • Keep in mind that you will still need separate flood coverage when you are in an area that is prone to flooding, especially if you have a mortgage on the property

3. National Insurance Brands You May Also Consider for Property Coverage

While it’s possible you never heard of Obie or Steadily, most household names in the insurance industry also offer landlord insurance. Big companies like Allstate Corp. and Progressive Corp. and others offer landlord insurance as well. While they do not specialize in landlord policies, their good standing in the insurance community and experience in the industry makes them a good option for many property owners.

Most national insurance brands offer customizable coverage as well but in a more traditional setting. Online-only providers like Obie and Steadily can provide great rates, but if you want to sit down with someone in person to discuss your options, a traditional insurance partner might be a better choice. Another perk of choosing a large company is the ability to bundle your policies to potentially save on all of them. 

If you have auto and homeowners insurance through a company like Allstate, it might be worth it to call your agent and get a quote for landlord insurance and compare it to Obie or Steadily’s online quote to see which option works best.

Types of Landlord Insurance

A single-family rental home and a five-story apartment building can both be residential real estate investments. But the types of risks you face as a property owner will vary depending on what type of building you own. Because properties differ in size, type and income they produce, landlord insurance is customizable. Depending on your situation, you might need some or all of the insurance options listed below.

Landlord Policy

Landlord insurance policies typically include property damage and liability coverage. General property insurance usually includes damage done to the dwelling caused by fire, water or weather, but each policy will spell out exactly what is covered. Liability coverage is always needed in the event someone is injured on the property and sues you for medical expenses. 

Commercial Property Insurance

If you own a rental house, duplex or similar smaller rental, you likely do not need commercial property insurance. This coverage is typically reserved for large apartment communities and has additional coverage for things like elevators, fire suppression systems and other large-scale systems found in these more complex assets.

Commercial Liability

As mentioned in the landlord policy section, commercial liability insurance helps you cover legal expenses and judgments if you’re sued by a tenant. Commercial liability coverage is typically included in a basic commercial insurance policy. Be sure to review your plan for liability coverage — if your plan doesn’t have it, be sure to add it on. 

Umbrella Insurance

Landlord policies don’t always include things like theft, vandalism and equipment. Adding an umbrella policy extends your coverage to more areas and provides a more complete safety net. You can also use an umbrella policy to extend coverage limits in areas like property damage or general liability. 

Employment Practices Insurance

Another add-on typically reserved for bigger operations, employment practices insurance is always needed for any property or company that employs people to oversee, maintain or otherwise work on the asset. If you hire a property manager or you own multiple properties, you may want to consult with a local agent to learn more about local employment insurance requirements. 

Should Landlords Require Renters Insurance?

Renters insurance and landlord insurance work together to cover the property of the landlord and the tenant, so they both need to be in place in any rental situation. Landlord insurance does not cover the personal property of tenants, and there is typically a high deductible before it kicks in.

For example, say a resident leaves their stove on and a fire causes $150,000 in property damage to the building. The landlord policy might have a deductible of $50,000 and would not cover the resident’s property. If you have landlord’s insurance, you’ll be responsible for paying the deductible and your insurance will help cover the cost of repairing your building. But it will not help the tenant replace their lost property, which may cause them to fall behind on rent. 

If they had a renter’s insurance policy, the renter would have help replacing things like clothing and furniture lost in the fire. By requiring renter’s insurance, you do your tenants a favor by ensuring their liability is minimized. If you’re a landlord, it’s at least worth letting your residents know about the importance of renter’s insurance and how affordable policies can be. 

Do You Need Landlord Insurance to Rent Rooms in a House?

Depending on your situation and your tolerance for liability, it’s possible you would need insurance to rent out individual rooms in a house. While this does not fall under the category of landlord insurance, you may be able to add an extension to your homeowners insurance policy to cover tenants you take into your home. 

Frequently Asked Questions

Q

What does a landlord insurance policy cover?

A

Landlord insurance covers property damage and liability issues faced by homeowners who rent out their properties. It is similar to homeowners insurance for properties that are not occupied by the owner.

Q

What is the purpose of landlord insurance?

A

Landlord insurance helps compensate you for damage done to a property you rent out. It also provides liability protections that offer important legal coverage if a tenant sues you.

Q

Can landlords provide renter’s insurance?

A

No. In fact, landlords should require their tenants to provide proof of renter’s coverage before they are allowed to move into a unit. Landlords do not want their coverage to be the subject of litigation when tenants do not carry renter’s insurance and seek out compensation after a loss.