Protect Your Rental Investment with Steadily
- Comprehensive coverage for fire, water, vandalism, and more
- Quick online quotes—get insured in minutes
- Tailored policies for short, mid, and long-term rentals
- Nationwide availability across all 50 states
As a landlord, your biggest risk isn’t just a late rent payment—it’s what happens when the unexpected hits: a tenant injury, a fire, a lawsuit, or a costly claim that your basic homeowners policy won’t cover.
That’s where landlord insurance and liability protection come in. If you’re renting out property—even one unit—standard homeowners coverage won’t cut it. You need policies built specifically for real estate investors.
This guide breaks down what landlord insurance covers, how to manage liability, and the steps every investor should take to protect their properties, income, and future portfolio.
Why Landlord Insurance Is Non-Negotiable
Homeowners insurance assumes you live in the property. Once it becomes a rental, most carriers will deny claims unless you’ve converted the policy to a landlord or dwelling policy (DP-1, DP-2, or DP-3).
Even if the property looks the same, the risk profile is completely different:
- Tenants may not report damage right away
- You’re not on-site to handle issues directly
- Liability exposure increases with visitors and maintenance
Skipping proper coverage could mean footing the bill for:
- Fires, floods, or water damage
- Tenant-caused destruction
- Injury lawsuits
- Rental income loss during vacancy
What Does Landlord Insurance Cover?
A solid landlord policy typically includes:
🏠 Dwelling Coverage
Protects the structure itself from damage due to:
- Fire and smoke
- Windstorms and hail
- Vandalism or theft
- Burst pipes or other sudden events
Note: Flood and earthquake coverage often require separate policies.
💰 Loss of Rental Income
Covers missed rent if the property becomes uninhabitable due to a covered event (like fire or storm damage).
⚖️ Liability Protection
Covers legal and medical costs if a tenant or guest is injured on your property and sues you.
- Legal defense fees
- Settlements or court judgments
- Medical payments for bodily injury
🧰 Optional Add-Ons
- Tenant vandalism coverage
- Equipment breakdown (HVAC, appliances)
- Rent default insurance (less common but available)
- Short-term rental (STR) endorsements for Airbnb-type properties
Protect Your Rental Investment with Steadily
- Comprehensive coverage for fire, water, vandalism, and more
- Quick online quotes—get insured in minutes
- Tailored policies for short, mid, and long-term rentals
- Nationwide availability across all 50 states
Landlord vs. Homeowners Insurance: Key Differences
| Feature | Homeowners Insurance | Landlord Insurance |
| Property Use | Owner-occupied | Renter-occupied |
| Covers Loss of Rent | ❌ No | ✅ Yes (if added) |
| Tenant Injury Liability | ❌ Limited | ✅ Full liability included |
| Personal Property | ✅ Yes (for owner) | ⚠️ Limited (appliances only) |
| Required for DSCR Loans | ❌ Not sufficient | ✅ Required by lenders |
If you’re using a DSCR loan or financing in an LLC, your lender will likely require proof of landlord insurance with replacement value and liability minimums—often $500,000+.
How Much Coverage Do You Need?
Every policy is different, but here’s a smart baseline for rental property investors:
- Dwelling replacement cost: Match your building’s full rebuild value (not just purchase price)
- Liability: At least $500,000 per occurrence (go higher if you own multiple units)
- Loss of rents: 6–12 months of gross rental income
- Deductible: Choose a level that balances affordability and emergency readiness
For short-term rentals, vacation properties, or multi-units, be sure your insurer knows how the property is used—misclassifying it can void coverage.
Common Liability Risks Landlords Face
Even great landlords face legal threats. Here are some of the most common risks:
- Slip-and-fall injuries on sidewalks, stairs, or icy driveways
- Improper maintenance claims (e.g., fire from faulty wiring)
- Dog bites or pet-related injuries
- Discrimination lawsuits under Fair Housing rules
- Security-related claims (break-ins due to broken locks or poor lighting)
Liability protection is your defense—and your safety net.
Extra Protection: Umbrella Insurance for Landlords
An umbrella policy extends your liability coverage beyond your base landlord policy. For example:
- Base policy covers $500,000
- Umbrella adds $1M–$5M+ in extra liability protection
- Applies across multiple properties, vehicles, or LLCs
This is especially smart for investors with:
- Multiple properties
- Higher-risk rentals (STRs, pools, pets, etc.)
- Assets in their personal name
- Professional relationships with contractors, tenants, or vendors
Entity Protection Isn’t Insurance (But It Helps)
Forming an LLC to hold your rentals adds a legal shield—but it doesn’t replace insurance. Think of it like this:
- Insurance pays the bills
- An LLC helps prevent personal lawsuits
Together, they form a comprehensive protection plan.
How to Shop for Investor-Friendly Insurance
Not all carriers are landlord-savvy. Look for insurers that:
- Understand rental property underwriting
- Offer multi-property or portfolio discounts
- Are licensed in the states where you invest
- Can handle STR, mid-term, and long-term rental policies
- Allow ownership by LLCs or entities
Top options include:
- Steadily (DSCR and STR-friendly)
- State Farm
- Proper Insurance (for vacation rentals)
- Foremost
- Hippo and Obie (tech-forward, landlord-focused)
Final Thoughts
Every real estate investor needs a smart insurance strategy. Landlord insurance isn’t just about checking a box—it’s about preserving your income and protecting your future wealth.
If you’re scaling with DSCR loans, building through BRRRR, or holding long-term assets, your coverage should grow with you. Don’t let a single event undo years of work.
Protect Your Rental Investment with Steadily
- Comprehensive coverage for fire, water, vandalism, and more
- Quick online quotes—get insured in minutes
- Tailored policies for short, mid, and long-term rentals
- Nationwide availability across all 50 states
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
