Landlord insurance (DP-3) covers rental properties that standard homeowners insurance does not protect. Here is what rental property owners need, how much it costs, and the best companies.
What Landlord Insurance Covers
Landlord insurance (typically a DP-3 dwelling policy) covers the physical structure of your rental property against fire, wind, hail, and other covered perils. It covers liability if a tenant or visitor is injured on the property, and loss of rental income if the property is uninhabitable after a covered loss. Landlord insurance does NOT cover tenant's personal belongings — that is their responsibility through renters insurance. Requiring tenants to carry renters insurance protects both parties.
Landlord Insurance vs Homeowners Insurance
Standard homeowners insurance (HO-3) is designed for owner-occupied properties. Using a homeowners policy for a rental property violates the policy terms and can result in claims being denied when you need coverage most. Most insurers ask whether the property is owner-occupied when writing homeowners policies. If you rent out your home even occasionally through Airbnb or similar platforms, notify your insurer.
Loss of Rental Income Coverage
Loss of rental income coverage reimburses you for income lost while your property is uninhabitable after a covered loss. If a fire renders your rental uninhabitable for 3 months, this coverage pays the rental income you would have collected during repairs. Most policies cover 12 months of rental income — verify coverage amounts reflect your actual annual rental income.
Short-Term Rental Insurance for Airbnb Hosts
Standard landlord insurance typically excludes short-term rental use through platforms like Airbnb and VRBO. Airbnb provides Host Protection Insurance with coverage limits but this program has significant gaps. Dedicated short-term rental insurance from Proper Insurance or CBIZ provides more comprehensive protection for frequent short-term rental operators. If you use your property for short-term rentals, verify that your policy specifically covers short-term rental use.