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How Much is Landlord Insurance: Average Landlord Insurance Cost

Landlord Insurance Cost

Landlord Insurance V/S Homes Owner’s Insurance

Landlord insurance is quite different from your homeowner’s insurance plan. Your homeowner’s insurance plan will not cover any damages if the property covered has been occupied by someone other than the owner. Yes, it will cost you at least an average of 20% less than the cost of any landlord insurance product, but are you willing to take the risk of a coverage refusal for a mere 20%.  

What is the Coverage of Landlord Insurance

Landlord insurance plans provide coverage to almost all of the risks entailed in landlord-ship. The landlords can select from many options to ascertain that they have covered all of the risks they want to mitigate. Every alternative you choose does affect the annual insurance premium. Some of the coverage are as under:

  • Landlord insurance covers any damages to the building. The plan provides coverage to any maintenance and repair on the property. The policy also provides coverage against any damages to the contents like furniture at the property from impairment. All of this covers the house or building that is under a tenancy agreement.
  • Landlord insurance protects you from income losses if your tenant defaults on payments or there are outstanding arrears of rent. You have to select a separate rider or option when purchasing the landlord insurance policy to protect yourself from such revenue losses. These options cost you at least 20% more than a landlord insurance plan but provide coverage even if the tenant had to evacuate due to a disaster. The policy also helps you with the legal eviction of a tenant.
  • Landlord insurance covers all medical and repair costs if the tenants submit claims of injury or property damage.
  • Landlord insurance supports claims against fire, water, and natural disaster. The landlord selects these options while buying the plan. This option also adds up to the average landlord insurance cost and must be purchased.

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Derivers of Cost | Landlord Insurance

Landlord insurance cost is dependant upon several factors detailed below.

  • The cost of landlord insurance considers the type and age of the property. The age of the property is under consideration to estimate the claims for repairs. The kind of residence that may be a flat, a house, or a condo affects the property’s value, and the area determines the cost of rebuilds. 
  • The location of the property is of great importance when assessing the landlord’s insurance cost. The criminal activities in the area will raise vandalism claims. If the state or city is prone to natural disasters like floods and tornados, insurance providers will deal with more damage claims. Eventually, resulting in an increment in the average cost of landlord insurance plans.
  • The landlord’s and the property’s insurance and claims history matter a lot. If the credit rating of the landlord is positive and there are lesser claims on the property. Costs of premiums will be relatively average.
  • The coverage and the extra options that you have ticked influence the cost of landlord insurance. 

Average Cost of Landlord Insurance

As of 2020, the average cost for landlord insurance for a reasonably average home is around $1,250/- and this is just the basics. A larger, more reputable insurance firm may take this cost up to $2,000/- depending upon the optional extras you are selecting.

A smaller, newer insurance firm will not be as expensive as the big guns in the market and can charge upwards of $950/- for your landlord insurance plan.

In the US, the state you live in and your insurer (the insurance company); affect the landlords insurance cost.

A general observation is that landlord insurance policies are 20% to 25% expensive than a regular home owner’s insurance plans.  

This 20% to 25% difference makes absolute sense because; the rented property faces more risks of damage and vandalism. Plus, the coverage is also for the income losses the landlord can face. 

There is a wide fluctuation in the average costs of landlord insurance plans from state to state and company to company. An estimation of the average cost of your insurance plan will depend on the factors previously cited. 

The advice here is to compare the prices and the options with the annual premiums you will pay. Better let your insurance agent do it. The insurance agent has expertise in landlord insurance plans and will put forward a reasonable suggestion.

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Suggestions to reduce landlord insurance cost

The prices vary a lot from insurer to insurer. It is better to analyze the landlord insurance costs with multiple insurance companies to decide on a feasible annual premium plan. Choose your optional extras very wisely.

Some of the suggestions that can help you reduce your landlord insurance costs are below:

  • Install Home Security System. Install proper home security and emergency systems at your rented property. When the insurance company is inspecting for risk assessment mortice deadlock, fortified fencing, security alarms have proven to be plus points. The more secure your property is, the lesser is the risk of vandalism, theft, intruder damage. You should have fire alarm and fire protection systems installed that reduces the risk of fires. Electric circuit breakers and insulations should be installed and maintained.
  • A maintained property has fewer repair claims and damages. Keep your property in a well sorted out condition. Maintaining your house will reduce the chances of injury to your tenant and his property. Avoid leakage, old insulations, and wiring, keep the word work mint and the boilers and AC in proper working order. During the valuation of your property, the insurance companies keep a vigilant eye for such little things. And keeping everything pristine can save you quite some dollars.
  • Look for discounts and package promotions. Ask your insurance agent for discount promotions and incentives from an insurance company. These free ad-on options on your policy will serve as extra coverage for your property.
  • Re-assess your excess amount. Excess is the amount you pay to settle the claims before the insurance company covers you up. Of course, an insurance company will not pay all of the damages. The landlord pays some of the amounts initially to settle the dispute until the insurance firm pays out. The higher is the excess figure (means the money that the landlord pays) lesser are the costs of landlord insurance.

About Us | Betters Insurance:

Betters Insurance is an independent insurance agency. We provide a wide range of insurance policies, catering to the business requirements of our clients. Our friendly, experienced professionals can help you select a comprehensive insurance package. We will evaluate your specific needs and recommend the right policy for your situation and budget.

Betters Insurance works with the top companies in the industry. We can do the comparison shopping for you. 

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