Tax

The Best Landlord Insurance Companies of 2022

Table of Contents What to Consider When Choosing One of the Best Landlord Insurance CompaniesCoverage

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For many, the best way to start investing in real estate is to rent out a second home or apartment. However, it’s important to protect that investment while doing so. Landlord insurance works like homeowners insurance in that it offers protection for the property’s structure for certain covered events. It also provides protection for the landlord if a tenant is injured on the property and the landlord is found legally responsible. Unlike homeowners insurance, though, landlord insurance does not generally offer personal property coverage for items inside the home that belong to the renter, which is why landlords should encourage or require their tenants to get renters insurance. However, landlord insurance may offer coverage to protect any equipment that lives on-site and is used to maintain the property, such as a lawn mower or pressure washer, provided it belongs to the landlord and not the tenant. Landlord insurance can also offer coverage for loss of rental income if the property is uninhabitable during repairs following a damaging event covered by the policy. Finding the best landlord insurance starts by finding the best landlord insurance companies.

  1. BEST OVERALL: Allstate
  2. RUNNER-UP: State Farm
  3. BEST FOR DISCOUNTS: Foremost
  4. BEST FOR COMMERCIAL SPACES: American Family Insurance
  5. BEST FOR MILITARY MEMBERS: USAA
  6. HONORABLE MENTION: Liberty Mutual

The Best Landlord Insurance Companies Options

Photo: depositphotos.com

What to Consider When Choosing One of the Best Landlord Insurance Companies

When shopping for the best rental property insurance, it’s important to find a company that provides affordable coverage where the property is located. Choosing a company with a strong AM Best rating is a good indicator the company will pay its claims as agreed. Of course, it’s also important to select a company that provides great customer service.

Coverage Area

Not every landlord insurance company offers coverage in all areas, so start by looking for a company that provides insurance coverage where the rental property is located. This will help narrow down the available choices of the best landlord insurance companies.

It’s also important to understand that the location of the property could affect the price of landlord insurance. For instance, properties located within metropolitan cities are typically more expensive to insure than those in rural areas because of the difference in property values and the higher likelihood of a landlord making a claim. Likewise, if the property is located in a high-crime area, landlord insurance rates could be higher given the increased risk for damage to the property.

AM Best Rating

A key consideration when shopping for the best landlord insurance companies is finding a company that will pay its claims as agreed. AM Best, a well-known credit rating agency that specializes in insurance companies, reviews credit ratings, financial data, and other research to determine a company’s creditworthiness and financial strength, which is a good indicator of whether the company is able to pay its claims.

When reviewing AM Best ratings, look for companies with a score between B+ (good) and A++ (superior). Companies could receive scores between B (fair) and D (poor), but those lower scores generally do not speak well to their ability to pay their claims to policyholders.

Standard Coverage vs. Additional Coverage

As with all insurance products, each landlord insurance policy from different companies offers a variety of coverages, either standard in a basic policy or offered as additional, optional coverage. Standard coverage is generally found in most landlord insurance policies and typically includes dwelling coverage and liability coverage. A basic policy may also include coverage to protect the landlord’s personal property, such as a lawn mower that’s stored on the property for a tenant’s use, or large kitchen appliances, which are located at the home.

Additional coverage can be purchased to supplement the standard coverage so the landlord’s property is more fully protected. For instance, burglary coverage could help pay to replace a lawn mower if it gets stolen, but only after the deductible is met. Coverage for vandalism is often available for an additional cost.

Quote Process

Shopping for quotes is an important part of finding the best landlord insurance policy. Having quotes to compare is useful to help find rates that are affordable, so look for companies that make it easy to get a quote. Many landlord insurance companies have an online quote tool wherein users enter the requested information and a quote is generated. Additionally, quotes are often available by phone or through a local agent to give customers a more personalized quote for their specific needs.

Keep in mind that quotes are an estimated cost of what landlord insurance could cost, not an exact price. Most likely, the exact price for a landlord insurance policy will not be available until it’s time to actually make a purchase.

Discounts

Insurance companies are known for providing discounts to help policyholders save on their rates, and landlord insurance companies are no different. The most common discount is for bundling two or more insurance policies together, such as landlord insurance and an umbrella insurance policy (which provides coverage in excess of the limits provided by existing policies and is intended to protect the policyholder in the event of a large or potentially financially devastating claim). But there often are many more discounts to be had that are specific to the insurance company and the landlord’s personal situation.

For instance, many insurers offer discounts for having a home security system in place, which could help reduce premium costs. Policyholders who purchase their landlord insurance from the same company where they have other insurance policies also may receive a loyalty discount. It’s important to ask the company or agent about all available discounts to maximize savings.

Claims Process

Nobody wants to experience a situation that necessitates having to file a claim, but if it happens, they want to know that their landlord insurance company will process the claim quickly so repairs can start. Therefore, it’s important to find out not only how easy it is to file a claim but also how status updates will be provided and how quickly a claim may be resolved.

Many insurance companies today offer the capability to file a claim online, by phone, or through the company’s mobile app. Status updates also may be available by going online or logging into the app. A streamlined claims process is essential to resolving a claim as soon as possible.

Customer Service

Obviously, finding a landlord insurance company that provides excellent customer service is essential. After all, no one wants a company that disappears once the policy premiums are paid. When shopping for landlord insurance, talk with other landlords if possible to see who they recommend for good customer service. If reading online reviews, take them with a grain of salt since many customers only take the time to write a review after a negative experience. A better gauge with which to judge the company is how these negative reviews are handled, so check to see if the company responded and what it said to try to right the situation. No insurance company is perfect, but if it works to resolve customer concerns then it is likely to be worth looking into.

Also, check customer service reviews with the Better Business Bureau. Not only does the BBB site show what customers have to say about a company’s customer service, but it often also shows an update on how the claim was resolved. This can provide crucial insight into how a landlord insurance company treats its policyholders.

Our Top Picks

When researching the best landlord insurance companies, it’s important to find companies that offer the necessary coverage at affordable rates, have strong AM Best ratings, and make it easy for policyholders to get a quote or file a claim. The following meet all of these requirements and more.

The Best Landlord Insurance Companies Option: Allstate

Photo: allstate.com

Why It Made the Cut: Allstate checks a lot of boxes for landlord insurance, including offering discounts for landlords with multiple properties, a wide coverage area, and a good selection of additional coverage. Customers can get a quick quote online, though this service may not be available in all ZIP codes. However, Allstate has a large network of agents who can provide a tailored quote that is specific to the landlord’s needs.

While Allstate offers the usual standard policies that include dwelling coverage and liability coverage, it also offers standard coverage for other structures, such as a detached garage or a shed. Other insurers in this space may charge extra for this as additional coverage. Allstate also offers discounts on services that the landlord may use to freshen the property between tenants, such as carpet cleaning and painting. This can be a great benefit that can save the landlord quite a bit of money depending on how often they experience renter turnover.

Specs

  • Coverage area: 50 states and Washington, D.C.
  • AM Best rating: A+
  • Quote process: Online, agent
  • Claims process: Online, phone, agent, app

Pros

  • Standard other structures coverage
  • Discounts for landlords with multiple properties
  • Discounts on move-out/move-in cleaning and repair services

Cons

  • Online quotes may be unavailable in some ZIP codes

The Best Landlord Insurance Companies Option: State Farm

Photo: statefarm.com

Why It Made the Cut: State Farm has a lot of opportunities to tailor coverage through add-ons that cover data compromise, identity restoration, loss assessment coverage (which covers a condo owner’s share of any assessment against all unit owners because of an insured loss or liability), tenant move-back expenses (for when a tenant moves back to the premises after living in a temporary location following a covered loss at the property), workers’ comp, and HVAC loss reimbursement (which provides reimbursements for payments made to a tenant because of a total loss of heating or air conditioning due to a covered mechanical breakdown or electrical failure of the HVAC system). The company also offers discounts on home alert systems such as fire, smoke, and burglar alarms or home monitoring systems. Other discounts may be available; landlords can check with their State Farm agent to see exactly which discounts they are eligible for to help decrease their policy premiums and save money.

As well as this laundry list of endorsements, State Farm offers standard other structures coverage, which is only offered as an add-on by some other insurers in this space. Other structures coverage helps protect detached structures such as sheds, fences, or detached garages, making it a must for landlords who rent out single-family properties with these features.

Specs

  • Coverage area: 50 states and Washington, D.C.
  • AM Best rating: A++
  • Quote process: Agent
  • Claims process: Online, phone, agent, app

Pros

  • Standard other structures coverage
  • Multiple unique policy add-ons for tailored coverage

Cons

  • Quote process unavailable online
  • Discounts vary by state and may not be available to every landlord

The Best Landlord Insurance Companies Option: Foremost

Photo: foremost.com

Why It Made the Cut: Foremost has a long list of available discounts that include being a member of a landlord association, using a property management company, being claims-free, and using a tenant screening service. Landlords can work with an agent to find out whether coverage is offered in their area and to determine which discounts are available to them. Agents are located in every state except Hawaii, as well as Washington, D.C.

Landlords can opt for a basic policy that just includes dwelling coverage if they want to save money. However, they can also choose additional coverage from a preset package or customize their policy to pay just for the coverage they need. In addition, landlords with multiple properties can combine their policies, which can streamline costs and save money. They also have the option to increase replacement cost coverage, which reimburses up to 25 percent above the insured amount. That means that if the home is deemed a total loss, the landlord can make a claim to rebuild the house to the same specifications even if the costs of materials and labor are higher than their dwelling coverage cap.

Specs

  • Coverage area: 49 states and Washington, D.C.
  • AM Best rating: A
  • Quote process: Online, agent
  • Claims process: Online, phone

Pros

  • Choice between customized coverage and preset packages
  • Numerous landlord discounts applicable for a wide variety of circumstances
  • Option to combine policies for multiple rental properties
  • Option to increase replacement cost coverage

Cons

  • Basic policy is limited to dwelling coverage
  • Loss of rent coverage only available as an add-on
  • Coverage may not available in all states

The Best Landlord Insurance Companies Option: American Family Insurance

Photo: amfam.com

Why It Made the Cut: American Family Insurance offers a Business Owners Policy (BOP) rather than a landlord-specific policy, with possible add-ons like commercial liability umbrella and business auto insurance. This makes it a good option for landlords who own commercial spaces, as well as residential landlords who own multiple properties. However, American Family Insurance currently only operates in 19 states, so landlords should check to make sure their location is covered by this type of policy.

For commercial landlords, American Family Insurance offers a variety of options that can be combined to maximize protection on their properties. This includes commercial liability umbrella coverage that can protect against major accidents or incidents, and business auto insurance if the landlord owns any vehicles used in the business, such as a maintenance truck.

The company’s website also contains a wealth of resources and information for commercial landlords, which can be very helpful for landlords who are new to the commercial space.

Specs

  • Coverage area: 19 states
  • AM Best rating: A
  • Quote process: Online, agent
  • Claims process: Online, phone, app

Pros

  • Coverage can be combined with additional policies designed for business owners
  • Many free online informational resources specifically designed for commercial landlords

Cons

  • Relatively limited coverage area of 19 states

The Best Landlord Insurance Companies Option: USAA

Photo: usaa.com

Why It Made the Cut: Available to active and former military members and their eligible family members, USAA offers many options tailored to its membership, such as coverage for renting out a room in their primary residence rather than an entire rental home. This is a unique offering in the landlord insurance space.

USAA is well known for offering insurance tailored to the needs of military families. For instance, a military member who chooses to rent out their former home rather than sell it when relocating to a new military base can actually have a policy that covers up to 10 tenant-occupied properties. Since military members may move every few years, this can be a good way for them to build up their investments through multiple rental properties, while still having the option to move back to one of those properties once they have retired from the service.

Also, while many insurance companies only cover properties the landlord owns but does not live in, USAA will cover a landlord renting out a room to a tenant for any reason.

Specs

  • Coverage area: 50 states and Washington, D.C.
  • AM Best rating: A++
  • Quote process: Online
  • Claims process: Online, phone, app

Pros

  • Coverage for military members who own multiple rental properties
  • Coverage for landlords who rent out a room in their primary residence

Cons

  • Landlord must be a current or former member of the military or a family member of one

The Best Landlord Insurance Companies Option: Liberty Mutual

Photo: libertymutual.com

Why It Made the Cut: Liberty Mutual offers things like inflation protection coverage and unique discounts for landlords who have coverage from a competing insurer and shop for policies from new providers to try and get a better rate before their current coverage expires. While there is no online quote process available, landlords can get more specific and tailored quotes from an agent, who can recommend coverage based on the landlord’s location and specific needs.

Liberty Mutual offers both standard and additional coverage, including inflation protection coverage. This additional coverage adjusts every year to account for inflation, helping to more fully cover any claims so the landlord won’t have unexpected out-of-pocket expenses after the deductible has been met. This is especially important during times of high inflation.

Also, in addition to other discounts, Liberty Mutual offers a discount for landlords who shop early for their next landlord insurance policy. If the landlord requests a quote before their existing policy with a different provider expires, Liberty Mutual will provide a discount on the rates. This can be a great way for landlords who plan ahead to save money on their landlord insurance.

Specs

  • Coverage area: 50 states and Washington, D.C.
  • AM Best rating: A
  • Quote process: Phone
  • Claims process: Online, phone, agent, app

Pros

  • Inflation protection coverage
  • Discounts for shoppers insured elsewhere who request a quote before their policy renews

Cons

  • Quote process unavailable online

Our Verdict

Allstate was named Best Overall because it has a variety of additional coverage, offers several good discounts, and is available nationwide. State Farm is our Runner-Up because landlords can tailor their coverage to their specific needs instead of paying for unnecessary coverage.

How We Chose the Best Landlord Insurance Companies

To choose our picks for the best landlord insurance companies, we compared a number of key factors for each company. These include the standard and add-on coverage available from each insurance company, what the quote and claim process is for each company, and each company’s AM Best rating. We also looked at the coverage area for each company and searched for extras like apps or educational content on company websites. After a full evaluation, we chose the ones that stood out the most among their competitors for specific categories, including Best Overall, Best for Discounts, Best for Commercial Spaces, and Best for Military Members.

Before You Choose One of the Best Landlord Insurance Companies

While the insurance companies listed here were chosen based on our criteria, that does not mean every company listed is a good choice for every landlord. Instead, it’s best to conduct independent research when looking for a landlord insurance policy. In addition, those interested in renting out a room in their home on sites like Airbnb need to be aware that landlord insurance will not cover that situation. Instead, adding coverage through a homeowners policy or purchasing a completely new policy would be necessary.

Of course, for those who have questions on exactly what landlord insurance coverage they need, it’s best to consult with a landlord insurance agent for more information.

Cost of Buying a Policy From One of the Best Landlord Insurance Companies

The cost of landlord insurance will vary from landlord to landlord and policy to policy. Rates depend on a number of factors, such as the property’s age, location, and size, as well as the amount and type of coverage. Obviously, the more landlord coverage purchased, the more expensive the premiums will be.

In addition to maximizing discounts, it’s also important to shop around for insurance quotes. For a fair comparison, landlords should aim to get at least three quotes on policies that have the exact same, or extremely similar, coverage. This will provide an accurate look at which insurance company offers the best rates for landlord insurance.

The Advantages of Buying a Policy From One of the Best Landlord Insurance Companies

When shopping for landlord insurance, buying a policy from one of the best landlord insurance companies could be the right choice. These companies all have superior AM Best ratings, so they are more likely to pay claims as agreed. Also, several of the companies offer coverage nationwide, making their policies widely available to a range of landlords in different states. In addition, these insurance companies have some standard and add-on coverages that are unique to the industry.

  • Several of the best landlord insurance companies offer nationwide coverage.
  • All of the best landlord insurance companies have superior AM Best ratings.
  • Several of the best landlord insurance companies offer unique coverage add-ons.

FAQs

Shopping for landlord insurance can be confusing for landlords who aren’t sure what coverage they need. This is especially true for landlords new to the commercial space. These are some of the most-asked questions regarding landlord insurance.

Q. Is landlord insurance a legal requirement?

While landlord insurance is not required by law, if the property is mortgaged, the lender may require landlord insurance. It’s also a smart choice for landlords to have coverage even if they don’t have a mortgage, since they could stand to lose their investment if the property sustains severe damage from a covered event, such as a fire or windstorm.

Q. Can I be covered by my standard home insurance?

The best homeowners insurance companies only offer coverage for owner-occupied homes, not rental properties. That’s why insurance companies offer policies specifically designed for landlords, since their insurance needs are different from the insurance needs of homeowners. It’s important to learn the difference between landlord insurance and homeowners insurance to determine which one applies to your situation.

Q. How do I make a claim on my landlord insurance policy?

While it depends on your landlord insurance company, claims often can be filed online, using the app, by phone, and by talking to an agent. This can be a good question to ask while evaluating the best landlord insurance companies to make sure the claims process will be easy for you to navigate.

Q. Do I need contents insurance as a landlord?

Landlord insurance may include coverage for the landlord’s personal property used in the maintenance of the property or for tenant use, such as appliances. It does not cover the tenant’s contents, which would be covered by renters insurance. Many landlords require their tenants to carry renters insurance for this reason. The best renters insurance companies typically offer the correct amount of coverage for a tenant’s personal property, and renters insurance is generally a low-cost insurance product.

Q. Can I get landlord insurance for multiple properties?

Many landlord insurance companies have landlord insurance policies for multiple properties. It’s important to check with an insurance agent during the quote process to make sure the company offers policies that will cover multiple properties if this applies to you.

Q. Is landlord insurance tax deductible?

Yes, the premiums paid for landlord insurance is tax deductible as a business expense. To gain a full understanding of the tax benefits of being a landlord, it’s a good idea to talk to a tax professional.

Q. Do I need landlord insurance if I live in the property?

Landlord insurance is only offered for tenant-occupied properties, not owner-occupied properties. However, you likely need landlord insurance if you live in one unit of a duplex or multi-family housing unit. For single-family homes, you’ll need a homeowners insurance policy if you reside in the home.

Q. What happens if my tenant can’t or won’t pay rent?

You can file an eviction lawsuit to have them removed from the property. Some landlord insurance policies may offer additional coverage to reimburse the landlord in this situation, though it’s not common.