Is Landlord Insurance More Expensive Than Homeowners Insurance?

Yes, landlord insurance is more expensive than homeowners insurance for the same property, typically by about 15% to 25%, even when you compare it against a homeowners policy stripped down to match landlord-level coverage. Two things drive that gap: the liability exposure of having someone other than the owner living in the home, and the loss-of-rental-income coverage a homeowners policy doesn’t include at all. Older properties and higher-risk locations push the number up further.

How much more does landlord insurance cost?

Expect to pay 15% to 25% more than a comparable homeowners policy on the same property, and closer to the high end of that range in disaster-prone regions or if you’re adding coverage beyond the basics. The National Association of Insurance Commissioners put the average annual homeowners premium at about $1,569 in 2022, the most recent year of nationwide data, with a landlord policy on that same home running closer to $1,800 to $1,950.

That comparison only holds when you’re comparing apples to apples. Homeowners insurance includes coverage for the owner’s personal belongings. Landlord insurance generally doesn’t, unless you’ve added a rider for a furnished rental. Strip the contents coverage out of the homeowners quote before you compare percentages, or the gap will look bigger than it actually is. For the full side-by-side of what each policy covers and where they overlap, see our comparison of landlord insurance vs. homeowners insurance.

Why does landlord insurance cost more than homeowners insurance?

Two factors account for most of the premium gap.

Liability exposure is broader. You’re still legally responsible for the property, but you’re no longer the one living in it day to day. If a resident’s guest trips on a broken paver, or a delivery driver slips on an icy walkway, that claim lands on your policy. Insurers price landlord coverage for exactly that scenario, and liability limits on landlord policies tend to run higher than what a typical homeowners policy carries.

Loss of rental income has no equivalent in a homeowners policy. If a covered event, say a kitchen fire or a burst pipe, makes the unit uninhabitable and the resident has to move out, this coverage reimburses you for the rent you’d otherwise be collecting while repairs happen. An owner-occupant never needs this. A landlord living on that income does, and insuring against losing it costs money.

Add in the fact that a resident who isn’t the owner has less personal stake in catching a small leak before it becomes a big one, and insurers see rental properties producing more frequent, larger claims than owner-occupied homes. All three factors get baked into the premium.

What else moves the premium up or down?

Beyond the base cost of insuring a rental instead of an owner-occupied home, a handful of property-specific factors change your number.

• Property age and condition. Homes built before 1978 can carry lead paint or asbestos, which raises rebuild costs once code upgrades enter the picture. Older systems, like an aging roof or outdated wiring, add risk too.

• Location. Wildfire and earthquake exposure in California, severe storms across the Midwest and Southeast, and hurricane or flood risk along the Gulf and East Coasts all push premiums higher, rented or not. Renting the property adds a layer on top of that baseline.

• Occupancy and turnover. Frequent turnover between residents and extended vacancy periods both raise risk, since an empty property is more vulnerable to vandalism and slower to catch a developing problem.

• Claims history. A history of claims on the property, or on your other policies with the same carrier, moves your rate the way it would with any insurance line.

How can I lower my landlord insurance premium?

A few decisions actually move the number without dropping coverage you need.

1. Raise your deductible if you can absorb a larger out-of-pocket cost on a claim. This is usually the single biggest lever available.

2. Bundle policies with one carrier if you own multiple properties or hold auto or umbrella coverage elsewhere. Insurers often price loyalty into the quote.

3. Shop your coverage annually. Rates and available endorsements shift year to year, and a broker or a round of comparison quotes can surface a better price for the same protection.

4. Screen residents carefully and require renters insurance. A resident who carries their own liability and property coverage keeps more claims off your policy entirely. See our guide to how much renters insurance to require for a specific number to put in the lease.

5. Keep up with inspections. Catching a slow leak or a loose railing during a routine walkthrough costs far less than the repair, the claim, and the premium bump that follow it.

Do I need landlord insurance instead of homeowners insurance?

If you own a property and rent it out, you need a landlord policy, not a homeowners policy. Keeping an owner-occupant policy on a home you no longer live in risks non-renewal or, worse, a denied claim when the insurer discovers the occupancy changed. For what a landlord policy actually covers, read our landlord insurance guide. If you still live in part of the property, or you’re weighing whether you need one policy or both, our guide to whether you need homeowners and landlord insurance walks through the specific situations where both apply.

FAQ

Is landlord insurance more expensive than homeowners insurance?

Yes, typically by 15% to 25% for a comparable level of coverage. The gap comes mainly from broader liability exposure and loss-of-rental-income coverage that homeowners policies don’t include.

Why is landlord insurance priced higher than a standard home policy?

Insurers price in the liability of a non-owner living in the home, the cost of replacing lost rental income after a covered loss, and the higher claims frequency rental properties see compared to owner-occupied homes.

Does landlord insurance cover my own furniture and belongings?

No, not unless you’ve added a specific rider for a furnished rental. Landlord insurance covers the structure and your liability as the owner, not personal contents.

Can I keep my homeowners policy after I start renting out the house?

No. Once the property is a rental, it needs a landlord policy. Insurers can deny a claim or decline to renew if they learn a home listed as owner-occupied is actually being rented out.

What’s the fastest way to bring my landlord insurance premium down?

Raising your deductible usually moves the number the most, followed by bundling policies with one carrier and requiring residents to carry their own renters insurance.

This article is general information, not insurance advice. Premiums, coverage availability, and policy requirements vary by insurer and by state. Confirm your specific numbers with a licensed insurance agent before you budget or bind coverage.