Landlord insurance is typically more expensive than homeowners insurance because landlords require more protection for their tenant occupied property. If you want to lower your premium, take some of the risks out of covering your property. Factors that influence your premiums include: It is not useful to cite "average" landlord insurance costs because of the number of variables involved. With homeowners’ insurance, you’re protected for damage you’ve caused. We discuss situations landlords face. Let’s look at the different categories of insurance to see what type of coverage is available for a landlord vs. a homeowner policy. As of 2015 (the latest data provided by the III), the average homeowners insurance premium was $1,173. CASH VALUE VS. In general, landlord insurance costs 10 to 25 percent more than comparable homeowners insurance, according to the Insurance Information Institute, (III). "If your tenant is unable to live in the home due to a fire, sewer backup, mold, etc., this coverage can reimburse you for lost income during the period the tenant is not making rental payments.". To avoid litigation in the event that your tenant's personal property is stolen or damaged, you can require a tenant to buy renters insurance (about $12 to $18 per month) as part of the lease agreement. Landlord insurance is intended to protect non-owner occupied properties where tenants reside. Describe for your insurer everything you do to improve the safety of the property. Water damage coverage for the building or anything inside the building from flooding, sewer backups and other natural disasters -- typically not covered by a basic policy. Landlord insurance covers you for the same things, but a comprehensive policy can also protect you against a host of other problems. Here's what you need to know about the differences between homeowners and landlord insurance. There are three categories of coverage: DP-1, DP-2 and DP-3. As the landlord, you insure your own possessions. Homeowners insurance covers owner-occupied homes while landlord insurance covers liability and damages connected to tenant occupied homes. It’s important to note, however, that homeowners’ insurance policies greatly differ by provider and property type. Require a sufficient damage deposit to avoid insurance claims and vetting tenants carefully. Neither landlord insurance nor homeowners’ insurance cover damage to tenants’ personal belongings. Vacant home insurance, on the other hand, is considerably costlier--between 1.5 and three times as much as standard insurance for occupied properties. Here are some common insurance claims you might face when renting out your house, their average cost, according to the Insurance Information Institute, and how to avoid them. Guaranteed replacement cost for your dwelling, allowing you to repair or rebuild even if the cost of building exceeds the original coverage amount. Homeowners insurance is generally designed to cover both your property and the people and belongings within it. "Some states have very specific coverage requirements that your homeowner's policy won't include. This protection covers you when someone visiting your home is injured. Bethell says the average cost of vacant home insurance is typically 50% higher than the average home insurance rate. Disclaimer: The products and services that appear on Insurance.com are offered by companies from which QuinStreet may receive compensation. All Rights Reserved. Homeowners Insurance only covers the liability when the property is owner-occupied. Homeowners insurance covers the actual building you live in (and associated structures like garages). 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