Most landlords buy a rental policy at closing and never open it again. The basics are almost always there: the building, your liability if a tenant or guest gets hurt, and some lost rent if a fire makes the place unlivable. The differences show up in the choices around those basics. Whose name is on the policy, how a roof claim gets paid, whether a broken sewer line under the yard is covered, and whether you can rent by the week are all decisions someone made for you, often without telling you.
This guide covers those choices in plain language. If you are still deciding whether you need a landlord policy at all, begin with what a homeowners policy will not cover on a rental, or visit our rental property insurance page. Western Pacific Insurance is an independent agency serving landlords in Nevada, Arizona, California, and Utah, and we have local versions of this guide for Henderson, Phoenix, San Diego, and Lehi.
Start with how the policy settles a claim
Landlord policies come in a few styles. The narrowest cover only a short list of named risks: fire, lightning, wind, hail, smoke, and explosion. Broader versions add more to that list, such as burst pipes, falling objects, and the weight of ice and snow. The broadest cover everything unless it is specifically excluded. If you rent out a condo, there is usually a separate version built around the unit itself and whatever the association does not insure.
Next, look at how a loss gets paid. A narrower policy may pay what the damaged part of the building was worth today, after wear and age. Broader policies usually pay what it costs to repair or replace it. On an older rental, those two numbers can be far apart. Ask us which kind you have and what it would take to move up, because making that change usually means rewriting the policy rather than flipping a switch.
Whose name goes on the policy
Plenty of investors hold their rentals in an LLC or a trust, and financial advisors increasingly recommend it for tax and liability reasons. Your insurance needs to match the deed. With some carriers, a personal LLC, LLP, limited partnership, estate, or trust can be added to a landlord policy as a second named insured next to you. Liability can also often be extended to a property manager or to the LLC itself. When the name on the deed and the name on the policy do not match, a claim can get messy quickly. Our page on LLCs, trusts, and who is the named insured goes deeper.
Roofs: payment schedules and replacement cost
Roof claims are where landlords tend to get an unpleasant surprise. A growing number of policies pay wind and hail roof claims on a roof payment schedule, which means the payout shrinks as the roof ages, based on its age and material. That keeps the premium lower, but a twenty-year-old roof may pay far less than a new one costs. Some carriers offer an upgrade that pays the full cost to replace the roof after wind or hail, but only for roofs that qualify by age, material, and location, and it costs more. Our page on roof age, claims, and non-renewals explains why insurers pay such close attention to roofs.
Add-ons worth asking about
These are the options we raise most often with landlords. Availability, limits, and deductibles are set by each carrier and vary by state. The figures below are limits one carrier publishes, so read them as examples, not promises.
- Water backup: covers water that backs up through a drain or overflows a sump. One carrier offers up to $10,000, and says many owners choose $5,000 even though most of its backup claims run higher. Flood and surface water are not covered. See our water backup guide.
- Service line: pays to repair the buried water, sewer, or power lines you own between the street and the house, including the digging. One carrier lists up to $12,000 with a $500 deductible, and names rust, tree roots, freezing, and wear among the causes. Septic systems and wells are usually left out.
- Home systems and appliance breakdown: covers the sudden failure of the air conditioner, furnace, water heater, electrical panel, appliances, and pool or spa equipment. One carrier lists up to $50,000 with a $500 deductible. Normal wear and tear is still excluded.
- Matching: helps pay to make undamaged siding, roofing, or windows match the repaired section so the building looks reasonably uniform. One carrier offers up to $20,000.
- Short-term rental: extends property and liability coverage when the home is rented by the night or week. More on this below.
- Your furnishings at replacement cost: if you furnish the rental, this pays to replace what you own there instead of paying its depreciated value.
- Extra rebuild coverage: adds 25% or 50% on top of the building limit in case rebuilding costs more than expected.
- Association assessments: helps when a homeowners association bills owners for a covered loss to common areas.
- Wrongful eviction and personal injury claims: covers tenant claims such as wrongful entry, invasion of privacy, libel, or slander. On many policies this is an add-on, not built in.
Our guide to policy add-ons explains how these riders work on a primary home, and many of the same ideas carry over.
Short-term rentals
A homeowners policy often will not respond to a home rented by the night, which is why we wrote about the short-term rental insurance trap. Some landlord policies can include short-term rentals. Liberty Mutual, for example, says stays under six months can go on its landlord policy when tenants occupy the home more than the owner does and the owner never lives there more than five months in a row. It does not state a nights-per-year cap, but coverage may not fit every short-term rental, so talk it through with us before you list. Your city may also require its own permit or license.
Will my rental qualify?
Every carrier sets its own rules. Below is what we will ask about, drawn from the guidelines one carrier publishes, so you can get ready.
- Size: generally up to four units per property, and up to sixteen rental units across everything you own, with lower caps possible depending on location.
- Use: units that tenants mainly live in as private homes, kept in good repair, and insured for the full cost to rebuild at today’s prices.
- Usually not a fit: homes vacant more than 60 days, homes under construction or a major remodel, flips or homes listed for sale, mobile and manufactured homes, historic or unusual buildings, and farms.
- A closer look: more than one loss in five years, a prior cancellation or non-renewal, a home built before 1930 (photos usually help), a log home, a business on site, or a home worth more than $1,000,000.
If your rental is worth more than $1,000,000, expect an underwriter to review it before any policy is offered. That is where an agent who knows the process earns their keep. Our high-value home insurance guide covers the same issues for primary homes.
Between tenants: the 60-day window
Vacancy is one of the easiest ways to lose coverage without realizing it. Many landlord policies expect a tenant to move in within about 60 days. If a turnover, a remodel, or a slow market will run past that, call us before day 60. A vacant home policy may be the better fit until the next lease begins.
Ways landlords may lower their premium
Discounts vary by carrier and by location, and not every discount is offered everywhere. Depending on the carrier, you may be eligible for:
- Multi-policy: bundling your home, auto, or umbrella with the rental. This is the one most owners miss. With some carriers, the credit only applies when all of those policies are bought through the same independent agent, which is exactly how we work.
- Claims-free: often based on several years without a claim.
- New or renovated home: a newer roof or newer plumbing, sometimes with proof. The credit usually shrinks as the update ages.
- Advance quote: getting quoted at least a day before the policy starts. Shopping early pays off.
- Preferred payment: paying by automatic bank draft, or paying in full.
- Tenant screening: using a property manager who screens tenants and inspects, or doing it yourself by screening every tenant, inspecting regularly, keeping each tenant’s renters insurance on file, and banning smoking in the lease.
- For a condo you rent out: some carriers add credits for a professionally installed sprinkler system, for wildfire mitigation recognized by a national program, for insuring several rentals together, and for insuring your own home and the rental condo through the same independent agent.
A higher deductible lowers the premium too. One perk to know about: Liberty Mutual Landlord Protection customers get 15% off TransUnion SmartMove tenant screening, which runs credit and criminal checks. Requiring renters insurance helps in more ways than one, as we explain in why landlords should require renters insurance and does landlord insurance cover renters.
What we will ask you
- The address, year built, square footage, and number of units.
- Roof age and material, and when the plumbing, wiring, and heating were last updated.
- How the home is rented: long-term lease, short-term stays, or a mix, and how often you stay there yourself.
- Who owns it: you, an LLC, or a trust, and whether a property manager is involved.
- Any vacancy you expect between tenants, and your losses over the past five years.
- Your other policies, so we can check for bundling credits.
Pricing on newer landlord programs often looks at each risk individually and at factors like how far you live from the rental, so accurate answers lead to an accurate quote. Many carriers now let you sign forms electronically, and some hold your pricing tier steady at renewal.
Carriers, and where an umbrella fits
As an independent agency, we compare more than one carrier. Liberty Mutual Landlord Protection is one carrier option we may be able to offer; ask us what fits. We do not promise eligibility, rates, or availability, because those depend on the carrier, your property, and where it sits. A serious tenant injury can also exceed a landlord policy’s liability limit. An umbrella policy adds a layer on top of your rental and personal policies.
For state basics, see our landlord guides for Nevada, California, Arizona, and Utah.
Get your rental policy reviewed
A landlord policy works best when its choices match how you actually rent. Pull your current declarations page, your lease, and a list of updates to the roof and plumbing, then call 702-932-3105 or request a quote online.
