What Is Landlord Insurance and What Does It Cover?
Explore the key protections this policy provides and why owning rental property means more than just regular home insurance
When you rent out a home, condo, or basement suite, your role shifts from homeowner to landlord, and so do your responsibilities. Standard home insurance does not account for the risks that come with tenants, income properties, or potential legal disputes. That’s why landlord insurance exists: to protect your property, your income, and your liability.
This becomes essential when a tenant accidentally starts a fire, fails to pay rent, or you’re left covering repair costs between leases. You might think about this the next time you decide to turn your home into a rental or expand your real estate portfolio.
What Makes Landlord Insurance Different?
Unlike a typical homeowner’s policy, landlord insurance is designed for properties that are not occupied by you but instead rented to others. It anticipates risks that come from tenant use, loss of rental income, and property damage caused by someone else’s negligence.
Instead of focusing on protecting your furniture and personal belongings, landlord coverage focuses on the structure, legal liability, and rental-related income streams.
Three Core Areas of Coverage
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Property Damage
This covers the physical structure of the rental unit such as walls, roof, floors, and built-in fixtures against damage from fire, storms, vandalism, or certain water-related events. Detached structures like garages or sheds may also be included if declared. -
Liability Protection
If a tenant or guest is injured on the property and claims your negligence caused it—like a faulty railing or icy steps—liability coverage can help with legal fees, settlements, or medical costs. -
Loss of Rental Income
If your unit becomes uninhabitable due to a covered event like a kitchen fire, landlord insurance may reimburse you for the rent you would have earned while repairs are made.
Additional Protections You Can Add
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Tenant vandalism coverage for intentional damage caused by renters
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Legal expenses related to disputes, evictions, or lease enforcement
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Rental income default protection for missed payments not caused by a claimable loss
| Covered Feature | Purpose |
|---|---|
| Property damage | Repairs or rebuilds due to fire, storm, etc. |
| Liability | Protects against legal claims and injuries |
| Loss of rental income | Replaces income when unit is uninhabitable |
| Optional tenant damage | Covers intentional harm by renters |
When You Might Need It
Even a small income property can expose you to serious risk. You should consider landlord insurance if:
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You rent out a house, condo, or basement suite, even short term
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Your property sits vacant between tenants for more than 30 days
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You want to protect rental income while still paying a mortgage
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You’re concerned about legal liability from tenant injuries
Caution: If you keep a homeowner’s policy while renting out your property, a claim may be denied if the insurer considers the use a misrepresentation.
Landlord insurance provides financial protection that goes beyond bricks and mortar. It safeguards your income and your legal standing. As a landlord, having the right policy gives you the confidence to rent out your property, knowing that the unexpected won’t put your investment at risk.