The Best Landlord Insurance Companies for 2023

Landlord insurance is the form of insurance that covers potential losses a landlord might encounter while renting a residential or commercial property, including property damage, liability claims, and lost rental income. This guide is designed to help landlords understand what landlord insurance is, how coverage works, how much policies cost, how to compare policies and quotes from different insurers, and our recommendations for the best landlord insurance companies.

Before diving into the details, here is a preview of our top picks:

1. State Farm (Best Overall)
2. Allstate (Runner-Up; Best Custom Policies)
3. Farmers (Most Affordable)
4. Liberty Mutual (Best for Handling Claims)

Understanding Landlord Insurance

Renting property is a big responsibility that comes with risk. Natural disasters, bad actors, and simple accidents always have the potential to damage properties and those who use them, and landlords face even more uncertainty because they usually do not occupy or directly utilize the property they own. When something goes wrong, it creates multiple problems for the landlord: their physical assets could be damaged and require costly repairs; tenants or other parties may aim to hold them liable for any harm or injury that occurred in the rental unit; and they might lose the ability to earn income from the property while under repair.

Landlord insurance limits these risks by compensating landlords in the event that they experience property damage or a liability claim against them. To protect your assets, your tenants, and your income, landlord insurance is an important consideration for anyone who rents property. Whether your property is residential or commercial, whether you rent out a single condo or a broad portfolio of properties, and whether your rental business is formally incorporated or not, you want to ensure that you have coverage that meets your needs.

What is Landlord Insurance? 

Landlord insurance is a form of insurance that provides coverage to landlords for property damage and liability claims associated with properties they rent. Landlord insurance is an essential form of insurance coverage for any landlord who wants to protect against harms that might come to their properties and the people who spend time in or near those properties. Common examples of such rental properties include: apartments, condominiums, townhomes, commercial buildings, and single-family homes. 

Landlords may be familiar with other types of insurance that protect real estate, like commercial property insurance, or that provide coverage for business risks, like general liability insurance. Landlord insurance is a unique offering that contains elements of other forms of coverage while also addressing the specific types of risk exposure that landlords face in renting property to others.

Landlord Insurance vs. Homeowners Insurance

Some new landlords make the mistake of assuming that a typical homeowners insurance policy will cover risks related to the properties they rent out. For people renting out a spare room in their house on a short-term basis, homeowners policies may suffice. Usually, however, rental properties need a different form of insurance to account for the different risks a landlord faces compared to a homeowner.

Like a homeowners policy, landlord insurance will cover many forms of property damage that could impact a structure, like fire, storm damage, or vandalism. Coverage for liability claims in the event someone is injured at the property would also be included in both types.

But the risk exposure for landlords is different from homeowners in two key ways: one, landlords usually do not live in the properties they rent, and two, landlords generate regular income from their properties. Insurers account for these differences by providing more limited personal property coverage for landlords than they do for homeowners (since landlords’ property is not usually at risk) and by providing coverage options for lost rental income from tenant defaults or the property becoming uninhabitable as a result of damage.

Landlord Insurance vs. Renters Insurance (i.e. Tenant Insurance)

Because landlords only own the unit that a tenant occupies and not any of the possessions that a tenant brings into it, landlords and tenants have different needs for insurance protection. A landlord insurance policy covers the rental itself and any related property and liability claims against the landlord, while a renters insurance or tenant insurance policy covers property belonging to the tenant and any liability claims made against them.

Since landlord insurance generally does not cover personal property in a rental unit, the best protection for tenants is to obtain a renters insurance policy. With a renters policy in place, tenants can receive compensation if damage to the property or some other issue, like a break-in and theft, lead to their personal belongings being lost, damaged, or destroyed.

This means tenants will be better off if they obtain a renters policy, which are usually inexpensive and easily bundled with other personal insurance policies. These policies also provide tenants protection for liability claims when a guest is injured in or near the property they are renting.

For landlords, having tenants with renters insurance is beneficial too, and many landlords require it. Part of the reason is that renters’ ability to collect compensation from an insurer lessens the likelihood that they will sue the landlord when something goes wrong. Many insurers also offer lower premiums on landlord insurance when such a requirement is in place.

Landlord Insurance vs. Business Owner Policy (BOP)

The scale of a landlord’s operations and properties may vary widely, from an individual just renting out a spare room or an in-law suite in their home to larger commercial enterprises with dozens of properties under management. For some landlords—especially those managing multiple properties—it makes sense to operate as a business in the form of a limited liability company (LLC) or other formal incorporation. In these cases, a business owner policy (BOP) may be a better form of coverage than standard landlord insurance.

BOPs usually couple commercial property insurance for the business’s assets with general liability insurance, which covers a wider array of potential risks than a landlord insurance policy. For instance, a BOP may be more comprehensive in covering personal property, loss of rental income in the event of property damage, or reputational damage.

Landlord policies are usually less expensive than BOPs, but the coverage is not as extensive. This means that a landlord policy is usually sufficient for smaller-scale landlords, but if you manage your rentals through an LLC, rent multiple properties, or generate most of your income from renting, it may make more sense to protect your business interests with a BOP.

How Does Landlord Insurance Work?

By purchasing a landlord insurance policy, landlords are able to transfer the financial risk of property damage or a liability claim to an insurer. For example, if you do not have landlord insurance and your rental property sustained $50,000 of damage in a fire, you would have to pay the full costs of repairing the property and bear any revenue losses from not being able to rent it out. Under a landlord insurance policy, the insurer would instead pay the $50,000 in repairs and potentially compensate you for lost rental income, as long as the event qualified for coverage under the terms of your policy and the costs were within the policy’s coverage limits.

As with other forms of insurance, landlords should work with their insurers to define the following elements of their coverage according to their needs.

• Coverage – The types of damage, incidents, and expenses that will be covered under the policy. Landlord policies typically include a component for property damage and another for liability claims.
• Monthly premium – The amount of money that the policyholder must pay to retain the policy on a monthly basis.
• Deductible – The amount of money a covered company must pay toward a claim before coverage kicks in.
• Policy limit – The defined maximum that the insurer is required to pay toward claims filed on the policy.

Landlord Insurance Coverage

Knowing the full extent and limitations of landlord insurance is essential for recognizing whether a policy actually meets your needs when you are shopping for coverage. Even with landlord insurance, you could end up on the wrong side of an expensive claim if you do not have the right type and amount of coverage for your rentals. Here’s a look at some of the key issues to think about when considering landlord insurance.

Who Is Covered Under a Policy

One of the factors that makes landlord insurance coverage complicated is the fact that the property owner is not the one making use of the property day-to-day. In addition to the possibility that your tenants will bring claims against you directly, you could get wrapped up in disputes where your tenants are themselves the target of a claim stemming from an incident on your property. This makes it important to understand what kind of insurance coverages your tenants have as well, because if your tenants are underinsured, you may face claims over incidents that you had little or nothing to do with.

To make sense of these potential situations, here are a few examples of how your landlord policy might come into play to protect you and potentially your tenants:

• Someone breaks into your rental property and steals some of your tenants’ valuable belongings. If the tenant has renters’ insurance, their policy will compensate them for the stolen goods. Your policy will cover any property damage from the break-in. If the tenant sues you for negligence on the basis that you had a duty to provide a security system, your landlord policy would pay costs associated with that claim.
• An employee slips and falls on a staircase in the space that one of your commercial tenants is renting. The tenant’s general liability insurance will pay the cost of the employee’s claim. If you are sued by either the employee or the tenant (e.g. because the staircase was poorly lit or had a broken step), your liability coverage will pay the associated costs.
• A guest of one of your tenants breaks an arm falling off a deck. If the guest fell due to the fault of the tenant (e.g., the guest tripped over an item the tenant left out on the deck), the tenant’s renters policy would pay the costs of the claim. If the guest fell for a reason that can be attributed to you (e.g. the railing on the deck was improperly installed), your landlord policy would more likely pay it.

Common Coverage Options

The three most common—and generally most important—components of a landlord insurance policy are coverage for property damage, liability, and lost rental income. A standard landlord insurance policy will almost always include property and liability coverage, and many leading providers also offer coverage for lost rental income.

Property damage coverage entails the types of incidents or damages affecting the property for which the insurer will compensate the policyholder. For example, if the home’s roof experienced damage during a hailstorm, coverage under the property damage section of the policy would help the landlord with the cost of repairing the roof.

Liability coverage includes what the insurer will pay if someone is injured or harmed in the rental property and makes a claim against the policyholder. This might include legal costs, medical expenses, and compensatory damages.

Lost rental income comes into play when the issue or incident that led to property damage or a liability claim prevents the property from generating income. This may occur if a substantial repair is needed for the unit or if an accident renders the house uninhabitable. If lost rental income is included in the policy, the insurer will pay whatever revenues they would have otherwise generated while the rental unit was in use.

Additional Coverage Options

Landlord insurance is highly customizable, and insurers frequently offer additional coverages that can address particular risks that a landlord may be concerned about that would not be included under a typical policy. If you are interested in adding coverages to your policy, it is best to work with an agent or broker to understand what types of coverage may be available to you and what additions or endorsements make most sense given your portfolio of properties, risk factors, and financial situation.

While this is not an exhaustive list, some of the types of coverage that could be available to you include:

• Flood and/or earthquake: Insurers do not typically include these under standard property damage coverage because the potential size of a payout can be very large, but the risk levels are highly dependent on the property’s geography (e.g., being in a flood zone or near a fault line). While earthquake insurance is not usually included in a standard policy, insurers might be required to offer it, as is the case in California.
• Guaranteed income: Many standard landlord policies will cover instances where the landlord cannot generate income because the property is uninhabitable, but not when the landlord loses income because the tenant simply doesn’t pay rent in full. Guaranteed income coverage provides compensation to the landlord in such cases.
• Landlord contents: Standard policies may include some limited coverage for equipment or other landlord possessions kept at the rental, especially for items that are used for maintenance, repair, or upkeep of the unit. If landlords store other belongings in the rental, they may require additional coverage for those items.
• Construction expenses: Sometimes in the process of repairing damage to a property, landlords incur additional expenses beyond the simple cost of the repair if additional construction is needed to ensure that the structure meets building code regulations. Insurers offer coverage for such situations as an add-on. In these situations, landlords should also make sure to have builder’s risk insurance, as most property insurance policies don’t provide coverage during the course of construction.

Landlord Insurance Policy Types

Often when shopping for landlord insurance, you will see different policies referred to as DP1, DP2, or DP3. “DP” stands for “dwelling property,” and the number refers to the level of coverage, from DP1 (the most basic) to DP3 (the most comprehensive). 

These policies differ based on two key issues:

• Named risks vs. open perils. A policy based on named risks only allows coverage for incidents that are explicitly listed in a policy, while open perils will cover any incident so long as the policy does not exclude it. 
• Payment for replacement cost vs. actual cash value. Replacement cost is what it costs in today’s dollars to rebuild or repair the property for a covered incident. Actual cash value is the cost to rebuild or repair the property minus depreciation. ACV accounts for decreases in value due to age or wear and tear. 

The different possible combinations for those two components produce the DP1, DP2, and DP3 coverage types:

• DP1 coverage is based on named risks and pays actual cash value. Because the list of covered incidents is more limited and the payouts from ACV are lower, DP1 is considered to be the most basic form of coverage and as a result usually has less expensive premiums.
• DP2 coverage is based on named risks but pays based on replacement cost. DP2 policies are also more likely than DP1 policies to include coverage for loss of rental income due to a covered incident. 
• DP3 coverage is based on open perils and pays replacement cost. Like DP2 policies, DP3 coverage commonly includes loss of rental income. Together, these factors make DP3 coverage the most comprehensive available to landlords but usually the most expensive.

What Landlord Insurance Does Not Cover

Because landlord policies are so customizable, the types of coverages and risks included in a policy can look very different. As explained previously, landlords have many additional coverages available beyond what is typically included in a standard policy. However, some areas that are less likely to have coverage available under a landlord policy include:

• Tenant belongings: This is one of the more commonly understood exclusions for landlord insurance: insurers will not cover the personal possessions of those living in the structure. Tenants can instead purchase their own insurance coverage for personal belongings with a renters policy.
• Routine maintenance and repairs: The cost of repairing or replacing broken appliances or expenses related to general upkeep usually won’t be covered. However, it is possible that property damages related to a broken appliance could be covered (e.g., if a hot water heater leaks and causes flooding in the unit).
• Sewer backups: Insurers frequently treat backed up sewer systems differently than other forms of water damage or flooding and usually require a separate policy.
• Flooding and earthquakes: As mentioned above, insurers do not offer flood and earthquake coverage in standard coverage because risks are much higher in some locations than in others, but these coverages are frequently available as add-ons.
• Termite damage: Most landlord insurance policies will not cover damage caused by termites or pests. If termite damage is an issue for you, see our guide on the best termite treatment.

Commercial Landlord Insurance / Lessors Risk Insurance

Landlord insurance is inclusive of both residential and commercial properties, but renting commercial space tends to bring additional challenges. Because commercial tenants might have greater risk exposure from the nature of their operations or the number of employees or customers on the premises, it is even more important for landlords to have adequate coverage and make sure tenants’ risks are insured as well.

If you rent to commercial tenants, you will find that tenants often carry their own business insurance policies to cover property damage and liability claims that occur on their premises. Some commercial landlords assume that their tenants’ own insurance coverage is sufficient to cover risks that might involve the landlord. However, these policies have downsides because the landlord is not the target of coverage and does not get a say in the terms and conditions of the policy. 

This means that some risks—like lost rent or deliberate property damage done by the tenant—will not be covered under the policy, and the coverage limits may not be high enough to compensate you for a loss. Additionally, you can still face costly claims if your tenant lets coverage lapse or you are found negligent as the landlord.

If you are a landlord working in commercial real estate, you should seek a lessors risk insurance policy. These policies are designed for landlords and offer you protection as the property owner against claims resulting from tenants’ use of your property. This is distinct from a general liability insurance policy that you might purchase as a business owner, which will offer you protection from liability claims that a non-tenant third party might bring against you directly.

Landlord Insurance Requirements

Landlord insurance is not required by law for a landlord to rent properties, but it is almost always a good idea to have a policy. For landlords with one or a small handful of rentals, a single major incident could wipe them out financially, which makes insurance a key form of protection. For landlords who operate at a bigger scale, each additional unit they rent increases the risk that they will have some sort of claim to deal with, so having coverage in such instances limits their risk exposure.

It is possible that if you have a mortgage loan to finance the property you are renting, your lenders will require you to maintain a policy. And it is important to remember also that typical homeowners policies will not cover rentals, so your existing homeowners coverage could be terminated if you begin to rent out your home. For these reasons, you should check with your financial institution and insurer to see if you have the right type of coverage for your rental property.

How Much Insurance Do You Need?

When evaluating landlord insurance policies, you should weigh your needs based on two primary elements of your coverage: property and liability.

For property coverage, you essentially want to know what it would cost to rebuild your property in the worst case scenario of the structure being completely destroyed. One way to find this figure is to look at a recent tax assessment and see what the assessor finds for the value of the structure on your land. If your structure is older, you may want to update that figure based on current costs. Whatever figure you calculate is around where you should set your coverage level. 

It is important to note that insurers sometimes treat the “dwelling property” separately from “other structures” on the land, which might include garages, sheds, or other freestanding structures. If an insurer does not include such structures in property coverage, you may need to purchase a separate policy to cover their value.

For liability coverage, the right amount can be a little harder to estimate and may be more dependent on specific characteristics of the property. For example, an older home may pose more risks of a liability claim because of factors related to its age, like older wiring or plumbing systems that may be more likely to fail. You will want to consider what the potential medical and legal costs of a claim might look like and choose coverage levels appropriately. For landlords renting a single or small number of units, bare-bones liability coverage could be available as low as $300,000 per claim, but $500,000 is a common starting figure, and $1 million per occurrence is considered ideal. If you rent more units or have more tenants, you should consider a higher aggregate limit on your policy because of your increased risks. Landlords with a higher net worth may want to consider additional liability coverage or an alternative form of protection, like incorporating as an LLC or purchasing an umbrella policy. This will protect the landlord’s personal assets in the event that a lawsuit seeks damages above the liability limit of the landlord insurance policy.

Protecting Your Assets: LLC vs. Umbrella Policy

One factor landlords should also consider while they are evaluating landlord policies is how best to protect their personal assets. If a liability claim exceeds the landlord’s coverage limit, the landlord could personally be held responsible for paying out damages to the claimant—which could put the landlord’s personal savings and assets at risk. There are two common ways to prevent against this:

• Setting up as an LLC – As the name suggests, formally incorporating as a limited liability corporation limits the personal liability of a business’s owners in the event that the business is sued. Instead, only the assets held by the company are at risk. LLCs may also provide some benefits to the business owners in terms of tax structure, but LLC registration requires yearly registration fees with your state.
• Umbrella insurance – An umbrella policy provides the policyholder liability coverage in excess of the limits and coverages of that policyholder’s other insurance policies. For instance, if the coverage limit on a landlord insurance policy is $1 million and the landlord is sued for $1.5 million, the landlord could be responsible for paying the extra $500,000. If the landlord had an umbrella policy for $5 million of coverage, the $500,000 would instead be paid out by the insurer. But, as with other forms of insurance, umbrella policies only offer as much coverage as you buy, so if a liability claim exceeds the umbrella policy limits, a landlord’s personal assets could still be at risk.

Landlord insurance is a wise decision regardless of this choice because it provides baseline coverage for common types of claims the landlord may encounter. For protection beyond that, landlords will need to weigh the costs (i.e., annual LLC registration costs vs. umbrella insurance premiums) relative to the benefits of each approach.

Landlord Insurance Costs & Premiums

Specific landlord insurance costs will vary based on the tier of coverage (DP1, DP2, or DP3), the types of additional coverages the landlord includes in the coverage, the types of property being covered, and the condition of the property itself. Given how specific policies are to the landlord and the properties being covered, it is best to consult with an insurance professional to get accurate estimates. However, this section of the guide will give you a sense of what to expect in terms of costs and the factors that will affect your landlord insurance premiums.

How Much Does Landlord Insurance Cost?

The customizability of landlord insurance policies makes it difficult to generalize about landlord insurance costs. However, one good rule of thumb is that landlord insurance premiums cost between 15% and 25% more than the homeowner’s insurance for an equivalent property. This means that if you have a homeowner’s policy on a small property with annual premiums of $500, you could expect to pay between $575 and $625 if you converted that home into a rental and obtained coverage for it.

Factors That Affect Premiums

Insurers base costs on the level of risk presented by policyholders and their covered assets. For landlord insurance, some of the risk factors that an insurer will evaluate include:

• Number of rental units covered
• Type of rental units covered
• Property age and condition
• Property location
• Presence of high risk features
• Safety and security features
• Tenant type

Number of Units Covered

The more units you rent, the greater the likelihood that you will face property damage or a liability claim somewhere in your portfolio of properties. With this increase in risk, you likely need to purchase more coverage and insurers will be more likely to charge a higher premium.

Type of Units Covered

Insurers perceive different types and levels of risk for single-family homes, multi-family structures, apartment buildings, and commercial or office space. For example, the costs of repairing fire damage in an apartment building might be much higher than a multi-family home because more units could be affected and building code regulations are more stringent. These differences would lead to different premium rates for each.

Property Age and Condition

As with a standard homeowners policy, an insurer will want to know what condition a rental property is in before offering a quote. Units that are older or less well-maintained may create additional likelihood that an incident would cause damage. But even newer homes may have risk factors if they have been poorly built or maintained, and insurers will adjust price based on that.

Property Location

Location matters for landlord insurance cost because areas have different levels of risk. If your rental property is in an area with lots of extreme weather or higher crime rates, the insurer may charge higher premiums because the likelihood of property damage is greater.

High-Risk Features

Features like a gas stove, a wood-burning fireplace, or a swimming pool might be a selling point when attracting tenants, but they all increase the chance that the tenant or the property will experience harm leading to an insurance claim. These features are all likely to increase the landlord’s premiums.

Safety and Security Features

Features in the rental property that minimize risk to people and the property itself can help you save money on your landlord policy. These might include sprinkler systems that mitigate potential fire damage, locks and alarm systems that deter break-ins or vandalism, or smart appliances that warn about potential malfunctions.

Tenant Type

With the rise of short-term rentals through platforms like Airbnb, insurers are increasingly likely to consider who you are renting to when setting rates for a policy. Generally speaking, long-term tenants are perceived to be more careful and responsible with the rental than short-term tenants, so the costs to insure a rental meant for long-term tenants will be lower.

Finding Cheap Landlord Insurance

Landlord insurance is an expense that can produce major savings when something goes wrong with a rental, but many landlords understandably want to minimize their costs when shopping for insurance.

One way to do this is to look for insurance providers who offer bundles or multi-policy discounts that include other forms of insurance, such as commercial vehicle insurance or workers’ comp insurance. Solo landlords who are just renting one or two properties may be able to tie in their landlord coverage with personal policies for home or auto. Businesses managing multiple properties could try to find discounts by purchasing business insurance and landlord insurance from the same providers. Insurance agents for different providers will be able to tell you more specifically what types of bundles and discounts they offer.

You can also consider the tradeoffs from different levels of coverage. Policies with higher out-of-pocket deductibles or lower coverage limits are usually more affordable in terms of premiums but can be more costly in the event of a claim. Similarly, a DP1 policy will usually cost less than the more comprehensive coverage available in a DP3. 

Of course, one of the best ways to guarantee that you are getting a good price on insurance is to do some comparison shopping. Insurance brokers allow you to easily compare options across providers, but you can also contact multiple insurers directly to get quotes for comparison.

Finding the Best Landlord Insurance

With so many different types and levels of coverage available, finding the best landlord insurance policy can feel like a daunting task. But there are many helpful resources available to landlords looking for high-quality policies that meet their needs.

One good option is to work with an insurance broker. Brokers are individuals or companies who have business relationships with different insurers and can tell you how options compare across different providers. While broker fees will increase the cost of a policy, a broker will save you time in the research process and make it easy to understand the options available to you.

You can also work directly with an insurance agent. If you already have a particular insurance company in mind, agents for that provider can help you with a deep dive into all the different coverage options they have available. Agents may also be able to help you find discounts or bundles that help you save on the costs of coverage.

Finally, it is easier than ever to find information and purchase policies online. If you already are familiar with many of the options or have conducted research yourself, you can usually sign up for a policy directly through an insurer’s website.

Comparing Landlord Insurance Providers

Your choice of insurer and policy is an important decision, and you should make sure that you have all the information needed to make that decision wisely. Whether you work with a broker or agent or you just evaluate the options yourself, you should know some of the key areas where insurers and their policies differ so that you can make informed decisions about your coverage. Here are some of the key factors to keep in mind.

Coverage Options & Policy Limits

One of the most important factors when evaluating any insurance policy is the extent of the policy’s coverage. For landlord insurance specifically, one of the most important considerations will be whether to select a DP1, DP2, or DP3 option. As the policyholder, you will need to decide whether it makes sense to pay more for more comprehensive coverage, given the characteristics of the properties you are renting and your own tolerance for risk.

You will also want to consider the variety of customizable add-on coverages available through most insurers. If you feel that your rental(s) are vulnerable to risks not covered in a standard policy, you should work with potential insurers to see what additional coverages are available.

Regardless of which specific coverages you choose, you will also want to make sure that you are aware of the payment limits for each policy option and that these limits are appropriate for your needs. The limit on your property damage coverage should be up to the full value of the rental property, and the limits on liability should be enough to safely cover medical and legal expenses for a typical liability claim.

Reporting Claims

As a landlord, you want your claims to be filed and processed in a timely fashion to ensure that you receive compensation when you need it, and you want to be confident that insurers will agree to pay out the claims that you report. In evaluating policies, you should take note of each insurer’s processes for reporting claims to make sure that your coverage will come through when you need it. You can speak with representatives from different insurance providers to get more information about reporting procedures and other services or supports provided while the claim is being processed.

Premiums & Deductibles

Premiums and deductibles are the out-of-pocket costs that the policyholder will pay under their terms of coverage. The premiums are monthly or annual costs to retain the policy, while the deductible is what the policyholder pays toward a claim before coverage kicks in.

Premiums tend to be highest for DP3 coverage, followed by DP2 and then DP1. Add-on coverages for particular risks will also add to your premiums.

Because these costs can cut into your earnings as a landlord, they are usually one of the other main factors to consider when comparing policies. It is important to remember that premiums and deductibles usually correspond to each other: lower premiums frequently come with higher deductibles and vice versa. If you are more willing to tolerate potential higher out-of-pocket costs, you may be able to save on premiums; if you are looking to pay less on claims, you will have to pay more in premiums to have that protection.

Company Reputation

In addition to considering how an insurer’s policies can meet your needs as a landlord, it is also helpful to see what experiences other customers have had with those providers. An insurer may offer enticing rates or coverage options, but if they have poor customer relations or engage in questionable business practices, you may still want to avoid them.

Sources to consult for information on insurers’ reputations include J.D. Power and the Better Business Bureau. J.D. Power compiles ratings from customers to provide an overview of a company’s offerings and customers’ level of satisfaction. The Better Business Bureau is an organization that compiles information about customer concerns and rates businesses based on how trustworthy they are in their operations.

Financial Strength

In the event that a claim is brought against you, you want the assurance that your chosen insurance provider has the means to pay out the associated costs. If your insurer is not in good financial shape, claims could go unpaid. As a landlord, you may find yourself paying for expensive construction and repairs from property damage or having your personal assets at stake to address liability claims.

One of the best ways to check an insurer’s financial strength is to reference the ratings from a major credit rating agency, like AM Best, Moody’s, or Standard & Poor’s. Each of these organizations evaluates businesses’ financial health using their own unique formulas. Because the agencies consider different criteria (or weight factors differently), it is usually best to check multiple ratings to get a good picture of an insurer’s financial strength.

Best Landlord Insurance Companies Overall

State Farm (Best Overall)

Coverage Options & Policy Limits

State Farm offers an impressive variety of coverage options for landlord insurance that are tailored to different types of structures, including rental homes, apartments, condos, and commercial spaces. And State Farm’s coverage is extensive in scope: property coverage includes both rental dwellings and other structures, lost rental income is available as part of standard coverage, and State Farm will increase the amount of your coverage in line with inflation. For landlords who operate as a full-scale business, State Farm will also help you identify appropriate coverages like general liability insurance or commercial auto coverage.

Reporting Claims

State Farm allows you to initiate claims easily through a mobile app, online, or phone call, and you can track information about your claim easily through the State Farm website. While State Farm is processing the claim, policyholders can also take advantage of a special service for State Farm customers with referrals to a national network of contractors and other specialists who can help with repairs or construction in response to covered property damage incidents.

Premiums & Deductibles

State Farm’s premiums tend to be somewhat higher than competitors, but their standard coverage packages are also generally more extensive. Despite these higher costs, State Farm offers bundling options and discounts for other related business insurance policies which can give you some savings overall. To get a quote, you can enter basic information including your location and the type of coverage you are seeking on State Farm’s website. State Farm will connect you with a local agent who can provide you with more details about pricing and coverage options.

Company Reputation

State Farm is America’s largest insurer for home and property, and its strong reputation with customers is one of the reasons why. A recent J.D. Power study of home insurance providers gave State Farm a customer satisfaction score of 829 out of 1,000, which exceeds the industry average of 823 and was the highest of the insurers evaluated for this guide. State Farm additionally holds an A rating with the Better Business Bureau.

Financial Strength

State Farm demonstrates excellent financial strength across the major credit rating agencies. State Farm has the highest possible rating from AM Best, an A++, along with very good ratings of AA from S&P and Aa1 from Moody’s. State Farm is considered a highly reliable payer of claims based on these ratings.

Recommendation

State Farm is the best overall choice for landlord insurance. State Farm provides high-quality, comprehensive coverage that is tailored according to property types and the landlord’s business needs.

Allstate (Runner-Up; Best for Custom Policies)

Coverage Options & Policy Limits

Allstate’s standard coverages for landlords include protection for dwellings and other structures (like garages), liability, and lost rental income for up to 12 months. However, Allstate also has highly customizable policies, with add-on coverages like personal umbrella, flood and water, vandalism, burglary, and construction. This array of options helps ensure that landlords’ policies address their most important concerns.

Reporting Claims

Allstate makes it easy to file claims directly through their website or mobile app or through conversations with your insurance agent. Once you have initiated the claims process, your agent will work with you to discuss which of your coverages qualify and will keep you updated as your claim is processed. Allstate also provides support by offering referrals for temporary repairs and other services needed to respond to covered losses for property damage.

Premiums & Deductibles

As one of the nation’s largest insurers, Allstate offers a variety of bundles and multi-policy discounts to attract customers and keep their prices lower. When you request a quote through Allstate, you will be connected to a local agent who will work with you to explore the right coverage levels for your budget and find you discounts to save on premium costs.

Company Reputation

Allstate has a strong track record in the insurance industry and is well-regarded for its national reach and extensive coverage offerings. J.D. Power’s recent study of home insurance providers rated Allstate’s customer satisfaction at 829 out of 1,000, good for sixth overall and tied for the highest of those rated for this guide. The Better Business Bureau additionally rates Allstate as an A+ business, which is a strong endorsement of Allstate’s business practices and customer service.

Financial Strength

Allstate receives high marks for financial strength across all the major ratings agencies. Moody’s rates Allstate at an A3, AM Best gives it an A+ (Superior), and S&P grades Allstate at an A- on this metric. Together, these ratings indicate that Allstate has strong financial resources and a good history of paying claims.

Recommendation

Allstate is an excellent all-around choice given its national reputation and financial strength, highly customizable coverage options, and variety of bundles and discounts. 

Farmers (Best for Affordability)

Coverage Options & Policy Limits

Standard coverage with Farmers only includes dwelling property and liability, which is less extensive than the standard coverages from other insurance carriers evaluated for this guide. However, Farmers allows you to add a variety of increased coverages like landlord’s personal property or other structures coverage. Its optional lost rental income coverage will cover up to 18 months as opposed to the 12 months more common with other providers.

Farmers also offers unique benefits as part of its coverage. One such benefit is that Farmers makes it easier to consolidate coverage for multiple units under a single policy. Farmers also offers additional tools to support landlords as part of its offering, like the SmartMove service, which helps landlords quickly screen potential tenants.

Reporting Claims

The claims process with Farmers can be initiated with a variety of tools, including by phone, text message, website, or mobile app. Farmers representatives are available for live chat on their website or by phone to begin a claim or track progress. The Farmers online claims portal additionally makes it easy to upload documentation and track the status of your claims.

Premiums & Deductibles

Basic policies with Farmers tend to be a little less costly on average compared to other competitors, though this is in part because their standard coverages are not as extensive as their competitors’. Farmers also offers bundling—such as with business auto insurance—and special discounts for newly renovated structures. To get a quote from Farmers, you can call and be referred to a local agent. The agent will work with you directly to personalize coverage based on your properties.

Company Reputation

Farmers performs well on measures related to company reputation. The Better Business Bureau gives Farmers an A+ rating, and the insurer has been accredited by the BBB for nearly 70 years. In a recent study of home insurance providers, J.D. Power gave Farmers a customer satisfaction score of 814 out of 1,000, which placed it 12th overall out of all insurers.

Financial Strength

Farmers has excellent financial strength ratings, including an A2 rating from Moody’s, an A from AM Best, and an A from S&P. Policyholders with Farmers can be assured that the company is in a good financial position and will be able to pay out the cost of claims reliably.

Recommendation

Farmers is a good choice if you rent multiple units because of the ability to consolidate your coverages for multiple units under a single policy, rather than separately managing a policy for each individual rental you own. Farmers is also great for less expensive, basic policies.

Liberty Mutual (Best for Claims Experience)

Coverage Options & Policy Limits

Liberty Mutual includes dwelling property, liability, and rental loss as part of its standard coverage for landlord insurance. Landlords can also add inflation protection and personal umbrella coverage as custom add-ons to coverage.

One unique feature of Liberty Mutual is that landlords have more flexibility to determine the amount of property coverage on the policy than they do with other providers. While Liberty Mutual will offer coverage on property damage up to replacement cost, policyholders can elect a lower level of coverage to save on premiums if desired. Liberty Mutual also offers one of the best builder’s risk insurance policies on the market, which is convenient for landlords planning renovations in the future.

Reporting Claims

Liberty Mutual has one of the best claims experiences among insurers providing coverage for landlords. Liberty Mutual’s 24/7 claims center makes it easy to file claims at any time, and the process of initiating a claim usually takes 10 minutes or less. Liberty Mutual also has strong online tools for tracking claims and a good reputation for processing claims quickly.

Premiums & Deductibles

Liberty Mutual offers a number of discounts for their landlord insurance policies. These include discounts for bundling your personal home and landlord insurance policies, not filing claims for the previous five years or more, or requesting a quote before your policy with another carrier expires. To get a quote, you will need to call Liberty Mutual and speak to an agent who can help ensure that you have a policy tailored to your needs.

Company Reputation

Liberty Mutual has been rated A+ by the Better Business Bureau and accredited by the BBB for nearly 90 years. This accreditation means they work toward resolving consumer complaints in line with standards set by the BBB. A recent J.D. Power study of home insurance providers rated Liberty Mutual at 805 out of 1,000 for customer satisfaction, which placed it 15th overall.

Financial Strength

Credit ratings agencies give Liberty Mutual high marks across the board. Moody’s rates Liberty Mutual at the A2 level, AM Best gives Liberty Mutual an A, and S&P offers an A grade. These are all good indications of Liberty Mutual’s strong financial position.

Recommendation

Liberty Mutual is the best option for landlords who want a customer-friendly claims experience and options for coverage and pricing that help keep their premiums lower. 

References

• https://www.allstate.com/home-insurance/landlord-property-insurance.aspx
• https://www.farmers.com/landlord-rental-properties/
• https://www.libertymutual.com/property-insurance/landlord
• https://www.statefarm.com/insurance/home-and-property/rental-properties
• https://www.moodys.com/page/lookuparating.aspx?stop_mobi=yes
• http://www.ambest.com/home/default.aspx
• https://www.spglobal.com/ratings/en/index
• https://www.jdpower.com/business/press-releases/2020-us-home-insurance-study
• https://www.bbb.org/