There is nothing more troubling for your budget, then when you find out that your homeowner’s insurance policy does not provide coverage for the emergency expenses. You’ve been paying month after month a substantial amount only to find out that your plan does not cover the particular situation you experience. For this reason, it is essential to choose a well-rounded, comprehensive strategy that protects your property investment and allows you to plan for the long-term.
What Is Landlord Insurance?
Landlord insuranceis special coverage for those renting out one or more of their properties. It’s an insurance policy meant to protect a property owner from financial losses associated with renting out. This type of insurance covers the rental property and does not protect tenant belongings, for that you need tenant insurance.
When you own a rental property, you have a set of specific business risks that are not included in the regular homeowner’s insurance plan. If your coverage does not include particular instances of vandalism, natural disaster, damage, you are risking the loss of your income and livelihood.
For this reason, landlord insurance policies tend to include several types of protection: acts of nature coverage, personal property coverage, residence coverage, as well as fair rental income coverage. The last type of coverage pays you for the lost rental income, in case if the property cannot be used for a prolonged period of time, which is especially useful for small and medium landlords. Additional protections are available in the premium packages with the extra fees. The coverage usually varies in terms and depends on the type of property: single-family homes, condos, duplexes, and multi-unit properties.
In order to help you make the most informed decision, I’ve selected the best home insurance providers for landlords in the US. If you are looking for extensive coverage, a convenient digital experience, customized plans, or just cheap bundles, there is a coverage plan just for you. Let’s review major insurance provides and outline their unique offerings and advantages.
State Farm was founded in 1922 as an insurance provider for farmers in Illinois owned by policyholders. It later expanded its services into other types of insurance, such as life insurance, homeowners insurance, and became one of the largest insurance holdings in the US. State Farm is one of the Fortune 500 companies, and due to its scale and wide-presence offers some of the most reasonable rates. It has impeccable customer service and has a track record of financial strength and claim satisfaction. State Farm offers generous insurance with standard plans that include premium-type coverages. For instance, State Farm homeowners insurance policy usually includes coverage of additional structures on the premise, such as a garage, swimming pool, fencing, etc.
State Farm offers diverse additional coverage policy options, for instance, reimbursement for the equipment breakdown, coverage of heating, and air conditioning systems. It also provides some unconventional, and yet handy policy options such as coverage of living expenses of the tenant, if the tenant had to evacuate from the damaged property, coverage of data protection and restoration, in case of identity theft.
Liberty Mutual is one of the main pillars of the US home insurance market. It continuously receives the best rating for customer satisfaction, quality, and the range of service. Liberty Mutual has an “A” rating from the A.M. Best. It is also one of the leaders in the speed of claim processing. With Liberty Mutual, you don’t have to go through the lengthy process of insurance claims and expect a fast-track reimbursement. One of the signature features of Liberty Mutual is inflation protection. The policy limits of your coverage are automatically adjusted according to the yearly inflation to keep up with the rising costs of contractors and repairs.
Among the other attractive features are discounts for multiple plans, as well as discounts for insuring new and newly renovated properties. Additionally, Liberty mutual is unparalleled in their customer service; they provide flexible billing and payment options, as well as 24-hour claims support and a network of third-party contractors.
Metlife and its daughter companies are part of the oldest insurance holding that traces its roots back to 1868. In most states, it has established connections with vendors, tenants associations, and real estate boards. Metlife provides insurance for landlords who own rental units, as well as regular homeowners and personal property insurance. They have a unique plan for owners of multi-family rental units, where you have the option of insuring the whole rental building on one policy. There is also a plan for condo landlords, those who own a property in a condominium and rent it out. This policy includes coverage of the rental unit, liabilities, the tenant’s personal belongings coverage, loss of the rental income, and limited coverages for the medical expenses.
This insurance company is one of the oldest and one of the most prestigious in the US. It has a stainless reputation and an “A+” rating from A.M. Best. It also ranks in the top-tier in customer satisfaction and speed of claim processing.
Allstate prides itself on the customer-oriented approach with custom plans for any type of property and business needs. It is just like a buffet, where you can bundle various insurance policies in one plan, extending your coverage and receiving a discount. You can add to your plan the burglary coverage, liability coverage, fair rental coverage, etc. Additionally, with Allstate, you can insure your rental unit under construction and home improvements coverage (that reimburse expenses for home renovations that bring the property up to building code ordinances).
Foremost is a subsidiary of the Farmers Insurance Group; it received a special mention in this list due to its specialized coverage for landlords. The basic package of Foremost includes thorough property coverage, replacement costs, agreed loss settlement, liability coverage, and named peril coverage. The additional perks you can add to your plan include water damage for plumbing and sewage, repair costs, coverage of other structures on the premise, and loss of rental income. Additionally, Foremost offers a “Platinum package” for landlords with rental properties in different states.
American Modern is the leader in financial strength according to the A.M best reports, and specialize in insurance coverage for professional landlords with a lot of rental units. They have options for cheap rental properties, which cover just the necessary expenses, damage, and abnormal wear and tear. Nevertheless, they also have policies with extensive coverages similar to homeowner insurance.
One of the most notable plans of American Modern is the coverage of ten and more rental units. It is tailored specifically for property investors and can insure ten and more properties on one policy. The coverage includes loss of rental income, vandalism, building code improvements, emergency repairs, neighbor damage reimbursement, water/mold/insect/rodents, lawn, and debris removal. For an extra charge, you can also add optional coverage that encompasses burglary coverage, personal property, after-break in restoration, property liabilities, vacancy coverage. There are flexible payment options, where you can pay for your plan’s premiums in full or in several installments.
This insurance provider is a special case since only former or current members of the military can use its services. Nevertheless, it is one of the most profound insurance institutions with strong financial standing. It provides good rates and low premiums for eligible applicants. Although, the customer service and the speed of the claim processing are mediocre at best.
Nevertheless, it has good landlord insurance coverage at a reasonable price that includes: theft, fire, vandalism, liabilities, income loss, and damage. Additionally, USAA offers individual plans for big property owners, with the ability to insure up to 10 properties. USAA also provides discounts if you also insure home and auto through their programs.
This insurance provider received numerous praise from industry experts for excellence in claims handling. American family is not the most affordable company and does not provide plans for multi-units, but it has several optional coverages accessible only through its programs. The policies cover: medical costs, interruptions of computer operations, increased cost of repair and construction due to ordinances, etc.
Mariia serves as editor-in-chief and writer for the Rentberry and Landlord Tips blogs. She covers topics such as landlord-tenant laws, tips and advice for renters, investment opportunities in various cities, and more. She holds a master’s degree in strategic management, and you can find her articles in such publications as Yahoo! Finance, Forbes, Benzinga, and RealEstateAgent.