What type of insurance for rental property

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Home insurance for your rental property is one of your most important expenses as a landlord. Read on to learn what it covers and which providers are the best in your area.

If you’re renting out your home or investment property, you’ll need a type of homeowners insurance policy designed specifically for landlords. Often referred to as rental property insurance (RPI) or landlord insurance, this policy covers your rental home or apartment dwelling, your liability if something happens to the premises and a few other things you may need coverage for.

Keep reading to learn more about the differences between rental property insurance and homeowners insurance, in addition to our Home Media reviews team’s recommendations for the top five insurers on the market to cover you and your rental property.

5 Best Rental Property Insurance Companies

After in-depth research, we at the Home Media reviews team found the following providers to be the best home insurance companies for rental properties.

• Allstate: Our pick for extended coverage
• Travelers: Our pick for deductible savings
• Liberty Mutual: Our pick for discounts
• Farmers: Our pick for customizable coverage
• USAA: Our pick for military members

Allstate

• Our Rating: 96.75
• AM Best Rating: A+
• BBB: A+

Allstate is a reputable top player across multiple insurance industries, including home insurance and landlord insurance. It’s been in business since 1931, has an impressive financial strength rating of A+ (Superior) by AM Best and one of the highest BBB ratings in this review.

Depending on your needs, Allstate landlord insurance policies can be extremely comprehensive, covering the basics, such as dwelling and liability, in addition to plenty of extras. For example, you can include coverage for a rental property under construction, building code improvements, premises medical protection and more.

Pros and Cons of Allstate Rental Property Insurance

+ Assigns a dedicated insurance agent for each rental property insurance policyholder
+ Provides a wide range of coverage options available for purchase through your agent
+ Offers discounts for bundling with auto insurance or other products from Allstate

– Offers higher prices than many competitors in our review of dozens of home insurance companies
– Requires landlords to work with an insurance agent to get a quote

Why We Chose Allstate

Allstate earns our recommendation for its homeowners insurance policies, and its rental property insurance offerings are also strong. Allstate’s wide range of coverage, personalized customer service through assigned local agents and nationwide availability make it one of our top recommendations for investment property owners.

Visit Allstate’s website to learn more about its landlord insurance policies.

To Learn More: Allstate Insurance Review

Travelers

• Our Rating: 94
• AM Best Rating: A++
• BBB: A

Serving homeowners since 1864, Travelers is another top property insurer that has made a name for itself over the years. It has an exceptionally high financial strength rating of A++ (Superior) by AM Best, and it has grown to more than 30,000 employees and 13,500 agents and brokers.

In addition to auto insurance, home insurance and other products, Travelers provides rental property insurance policies to landlords nationwide. Depending on what you need, policies can include coverage for the property’s dwelling, other structures, premises liability, medical payments to others, landlord’s property and loss of fair rental value.

Pros and Cons of Travelers Rental Property Insurance

+ Has the most experience out of all insurers in this review
+ Includes a $1,000 limit to help pay medical expenses if a visitor is injured on the property, as long as you purchase liability coverage
+ Offers additional policies for umbrella insurance to extend your liability coverage

– Has lower ratings on its Android mobile app than many competitors
–Doesn’t offer coverage for mobile or manufactured homes

Why We Chose Travelers

We recommend Travelers as a well-rounded landlord insurance option that can cover single-family homes and rental properties with between one and four units, including condominiums, apartments and multi-family homes. 

The company has extensive experience, and its policies can include coverage for medical payments to others, which isn’t always offered by competitors.

Speak to a Travelers insurance agent at 844-204-3517 or visit the Travelers website to get a quote on your policy.

To Learn More: Travelers Insurance Review

Liberty Mutual

• Our Rating: 90.75
• AM Best Rating: A
• BBB: B

Although its AM Best financial strength rating of A (Excellent) is lower than most other providers in this review, Liberty Mutual is an established home insurance company option for rental property owners with more than 100 years of experience.

Its insurance agents customize your policy to fit you and your property’s exact needs. It can include dwelling coverage for repairing or rebuilding the property’s structure, premises liability coverage if an incident occurs on the property, wind or hail damage coverage for bad storms and fair rental value coverage if you’re unable to rent out your property during a covered repair project.

Pros and Cons of Liberty Mutual Rental Property Insurance

+ Includes a unique inflation protection add-on, which automatically raises your dwelling coverage each year to account for inflation
+ Offers early-shopper discounts if you get a quote before your current policy expires
+ Provides 24-hour claims assistance

– Has fewer additional coverage options than many competitors
– Has a lower BBB rating than other providers in this review

Why We Chose Liberty Mutual

We recommend Liberty Mutual to landlords and investment property owners looking for a few discounts for their insurance policy. 

You could be eligible for the Companion Home discount if you insure both your personal home with a homeowners insurance policy and your rental property. You could also receive a discount for going five or more years without filing a claim, and you could save for shopping for your next policy before your current one expires.

Visit Liberty Mutual’s website to learn more about its rental property insurance policies.

To Learn More: Liberty Mutual Insurance Review

Farmers

• Our Rating: 90.75
• AM Best Rating: A
• BBB: A-

Since Farmers sold its first policies in 1928, it has grown into a well-known insurer, serving more than 10 million households. It reaches across all 50 states through more than 48,000 independent insurance agents and around 21,000 employees. In addition to rental property insurance policies, Farmers offers car insurance, homeowners insurance, renters insurance, business insurance and more.

As with most competitors, Farmers’ landlord insurance policies are custom-built based on your needs. In addition to dwelling and liability coverage, a Farmers policy can include coverage for loss of rent, personal property, other structures and personal injury, which can help you if you’re sued by a previous tenant for wrongful eviction.

Pros and Cons of Farmers Rental Property Insurance

+ Covers all property sizes, including multi-unit buildings, unlike some competitors
+ Offers customizable coverage with optional choices
+ Provides a tenant screening service with SmartMove

– Doesn’t include other structures and loss of rent coverage in standard policies without adding them
– Coverage may be limited and less customizable in certain zip codes, depending on what your local agent is able to provide

Why We Chose Farmers

If you’re looking for a highly customizable insurance policy for your rental property, we recommend Farmers. Its landlord insurance covers all the bases with dwelling and liability coverage, while allowing you to customize your options for other structures, personal property, loss of rent and the unique option for personal injury. It also provides a useful tool for screening tenants.

Visit Farmers’ website to learn more about its rental property policies and to contact an agent near you.

To Learn More: Farmers Insurance Review

USAA

• Our Rating: 90.75
• AM Best Rating: A++
• BBB: A+

USAA is an insurance and financial services company that offers banking, loans, auto insurance, home insurance and more. It was founded in 1922 and ties for the highest BBB and AM Best ratings in this review. It stands out with impressive customer service, an online chat, a useful membership portal and a handful of additional perks and discounts.

USAA’s home insurance policies for rental properties can cover up to 10 of your tenant-occupied rentals. Rental property policies come with up to 10% off for bundling with other insurance policies, and they cover your building’s structure, personal liability and rental income while your property is being repaired during a claim. They also include home-sharing coverage if your home is both owner- and tenant-occupied.

Pros and Cons of USAA Rental Property Insurance

+ Includes a 25% discount on tenant screening services
+ Covers vandalism in its standard policy, which must be purchased as an add-on with some other providers
+ Provides flood insurance policies for extra coverage on flood damage

– Available only for military members and their families
– Requires you to sign up for a membership before getting quotes and cost information

Why We Chose USAA

If you or your family member is currently in or retired from the military, we recommend signing up for USAA and getting a quote for a rental property insurance policy. It offers comprehensive standard coverage that comes with a few extra benefits, such as a 25% discount on USAA’s tenant screening services and member discounts on home security, travel and more.

To Learn More: USAA Insurance Review

Compare the Top Rental Property Insurance Companies

* Better Business Bureau (BBB) ratings are accurate as of June, 2022.

Landlord Insurance vs. Homeowners Insurance

Although similar in many ways, rental property insurance and home insurance are different insurance products. If you own an investment property and plan to have tenants living in it long term, you’ll purchase a landlord insurance policy, rather than a homeowners insurance policy. Then, your tenants will purchase their own renters insurance policy to complement your policy, covering their own personal belongings and liability.

Here are more details about the primary coverages found in landlord insurance policies:

• Dwelling coverage: This covers damage to the dwelling and structure of the building after an unexpected event, such as a storm or fire. It pays up to a certain limit that you agree to when signing up for the policy. This limit is usually equal to the estimated value of the home, since it pays for its replacement after it’s damaged or destroyed.
• Other structures coverage: This coverage is usually equal to around 10% of your dwelling coverage limit, and it pays for repairs or replacements to buildings or structures that aren’t considered part of the main dwelling, such as a fence or detached garage.
• Liability coverage: If someone visiting your tenant gets injured by something on the property that you’re responsible for, you could be liable for legal fees and medical costs if they sue you. This coverage helps protect you from those unexpected costs.
• Landlord’s property coverage: Although your rental property insurance policy doesn’t cover your tenant’s personal belongings, it will cover your belongings that may be on the property and receive damage due to a covered peril. For example, if you include furniture in your rental, that’s considered your property and would therefore be covered if something happens to it.
• Loss of rent coverage: Similar to a homeowners insurance policy’s loss of use coverage, this covers months of rent that you may lose if the property is deemed uninhabitable after a covered peril.

While some of these types of coverage can often be found in homeowners insurance policies, such as dwelling and liability coverage, the amounts and terms of the coverage in the policy can be different.

Rental Property Insurance Add-Ons

Your rental property insurance policy can also come with various optional coverage additions or endorsements for the most comprehensive coverage. These options can vary depending on the provider you choose, since some insurers offer more add-ons than others.

Here are some examples of commonly offered coverage add-ons:

• Vandalism coverage: This is a common endorsement that pays for intentional or deliberate damage to the home by a tenant or someone else visiting the property. For instance, if a tenant decides to deface the walls with graffiti, this additional coverage option may help pay to paint over it.
• Building code or ordinance coverage: This helps pay for any permits or building code costs associated with repairs or replacements to the property after a covered loss. This coverage is a common add-on with standard home insurance policies, as well.
• Umbrella insurance: In addition to these optional coverage endorsements, you can also often bundle your policy with umbrella insurance, which is a type of insurance that extends your liability coverage to incidents that could happen on and off the premises of your rental property. Incidents might include injuries, damage to property, unexpected lawsuits and other personal liability situations.
• Flood insurance: If your property is located in a flood zone, you may need a flood insurance policy to protect your rental property’s dwelling from flood damage. Insurance agents from many top home insurance companies, such as Allstate and USAA, can offer these policies through the National Flood Insurance Program (NFIP).

More Insurance Types

Frequently Asked Questions

Methodology: Our system for ranking the best home insurance companies

Our team surveyed dozens of home insurance providers and created a scoring system to judge each company’s quality and service. We reach out for sample quotes, both over the phone and on the internet, to simulate an authentic customer experience. Here are the factors that account for our provider reviews:

• Coverage (20%): We analyze each provider’s coverage options, policy endorsements and coverage limits to determine quality of coverage.
• Customer service (15%): We also evaluate each company’s customer service options such as live chat, a customer support phone line and access to agents.
• Technology (15%): Similarly, we score providers based on their digital resources, such as a mobile app, online comparison tools and quote process.
• Reputation (15%): We gauge reputation by evaluating consumer reviews and third-party financial strength and customer experience ratings.
• Additional benefits (15%): Additionally, we weighed each company’s added benefits, including discounts and policy endorsements.
• Cost (20%): Last, we compare cost data for homes across the nation to assess how competitively priced each provider is.

Companies with the best customer service exhibit 24/7 availability, educational resources on their website, useful digital tools and a seamless claims-filing process. Providers that offer extensive discount options, endorsements, customizable coverage options and unique features score significantly higher than those that don’t, putting them toward the top of our recommendations to readers.

Ratings listed in this article are accurate as of October 2022.

A.M. Best Disclaimer