The 7 Best Landlord Insurance Companies of 2020

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Landlord insurance is a type of property insurance meant to help property owners protect their rental assets. Whereas traditional homeowners insurance only covers owner-occupied properties, landlord insurance is specifically set up to help landlords protect the buildings and land they own and lease against various losses. While landlord insurance policies can vary, the majority provide coverage for property damage, lost rental income when a property becomes uninhabitable, and general liability.

Consumers in the market for landlord insurance should compare policies based on their coverage inclusions, pricing, and providers' reputations for financial strength and quality. We pored over more than 15 landlord insurance companies to find the best of the best in terms of these factors, and here’s what we found.

Best Landlord Insurance Companies of 2020

Best Overall: State Farm

Pros
  • Excellent ratings for financial strength

  • You can customize your policy to meet your unique needs

  • You can add additional coverage for floods or earthquakes

Cons
  • You may not be able to get a quote for landlord insurance if you’ve never had a policy with State Farm before

  • Coverage add-ons can cause your premiums to rise

State Farm has a strong reputation for financial strength, which includes an A++ rating from AM Best and an S&P Global Rating of AA. Founded in 1922, State Farm now insures more cars and homes than any other insurance provider in the United States. In addition, State Farm came in fourth place in terms of customer satisfaction in J.D. Power’s 2019 U.S. Homeowners Insurance Study, which compared companies based on customer satisfaction, the claims process, billing, and several other factors.

Landlord policies from State Farm provide coverage for the building you own, whether it’s a single-family home, a multi-family unit, or an apartment building. You’ll also have coverage for all other structures attached to your property (e.g., fences, storage buildings, garages, etc.) as well as for general liability, loss of income, equipment breakdown, heating and air conditioning loss, and more.

State Farm lets you customize your coverage with a few different add-ons, including data compromise and identity restoration, which can help you get your business back on track if a data breach occurs or the landlord is a victim of identity theft. Ordinance of law coverage is automatically included for a minimum amount and “covers the loss of value and increased cost due to the enforcement of municipal laws or ordinances regulating the construction or repair of damaged buildings caused by an insured loss,” notes State Farm.

Coverage for landlords from State Farm is available nationwide. Since each policy is different, however, you’ll need to get a quote from State Farm to find out about policy limits, exclusions, and how to begin the underwriting process. Note that you do need a copy of a lease to prove your rental is occupied by a tenant.

Why We Chose This Company: We chose State Farm due to the numerous inclusions (identity restoration, business property, and ordinance of law) in their landlord insurance policies as well as their ratings for financial strength, which are crucial to consider.

Runner-Up, Best Overall: Liberty Mutual

Pros
  • Discounts are available if you are claims free over time

  • Special add-on protections can be purchased if you want to tailor your policy

Cons
  • Liberty Mutual scored below average in J.D. Power’s 2019 U.S. Home Insurance Study

  • Liberty Mutual may require you to have insurance on your primary residence with them in order to qualify for their landlord policies

Liberty Mutual is a household name for home and auto insurance, earning high marks for financial strength, including an A rating from both AM Best and Standard & Poor’s. The company has been around for more than 100 years and is the sixth-largest property and casualty insurer in the world, with more than 45,000 employees globally.

Landlord insurance from Liberty Mutual comes with standard coverage for physical structures and liability. However, you have the option to customize your coverage with add-ons for personal property, fair rental value, inflation protection, and umbrella coverage that provides yet another layer of protection against financial losses.

Liberty Mutual also comes with 24-hour claims assistance, and you may be able to qualify for discounts when you bundle your own homeowners insurance policy with a landlord insurance policy, or when you are claims free for five years or more. You can receive a discount if you get a quote for landlord insurance from Liberty Mutual before your existing policy with another provider expires.

Like other landlord insurance companies, Liberty Mutual tailors their policies to individuals and individual properties. As a result, you'll speak with an agent and provide personal information and property details to get a quote.

Why We Chose This Company: We chose Liberty Mutual as the runner-up because, while they don't automatically include extras like State Farm does, landlords have the option to tailor a landlord policy to suit their needs.

Best for Bundling Policies: Allstate

Pros
  • Get a discount for bundling policies

  • Allstate is known for their financial strength and reliability

  • Tailor your coverage with special add-ons

Cons
  • You must work with an agent to get a quote for your policy

  • Allstate scored below average in J.D. Power’s 2019 U.S. Home Insurance Study

Founded in 1931, Allstate Insurance currently backs more than 113 million proprietary policies worldwide. One factor that sets Allstate apart is their use of local agents that work directly with customers for a more personal insurance experience than some other companies offer. In terms of financial strength, Allstate boasts an A+ rating with AM Best and has an S&P Global Rating of AA-.

Allstate landlord policies include coverage for dwellings, other structures on the property, vandalism, burglary, fair rental income, building codes, and liability. In addition, you’ll get premises medical protection that can help cover medical bills if someone is injured on your property. Flood insurance and umbrella coverage can be purchased by landlords who want more protection against financial losses.

Allstate doesn’t offer quotes for landlord insurance online, but you can speak with an agent who can provide you with a free quote if you supply them with the property address and your personal details. Unlike their competitors, who don't offer bundling discounts for rental properties that are as robust, Allstate offers landlord discounts up to 25% for multiple policies if you also purchase auto insurance or your own homeowners insurance policy from Allstate.

Why We Chose This Company: Allstate has a strong reputation for quality and they offer multi-policy discounts for customers who have more than one rental property or other types of insurance policies with them.

Best for Multi-Unit Properties: Farmers

Pros
  • Screen tenants more easily with the SmartMove™ Solution

  • Personalize your coverage

  • Multiple-unit coverage

What We Don't Like
  • Standard landlord insurance policies don’t offer coverage for other structures not connected to your rental property, such as sheds and garages

Founded in 1928 in a tiny, one-room office in Los Angeles, California, Farmers Insurance now offers personalized coverage and service for their landlord policies and other insurance options. This company has an A rating for financial strength from AM Best.

Farmers landlord policies provide standard coverage for property damage, for instance, if your rental property is damaged by wind or a burst pipe that leads to extensive water damage. You’ll also get standard liability coverage, which can kick in if someone is injured on your property and needs medical care. Policies can cover multi-unit buildings such as triplexes and fourplexes, making it convenient for landlords to get broad coverage in one spot.

Landlords can purchase optional coverage for potential claims such as for loss of rent when a property becomes uninhabitable, personal property, personal injury, and coverage for other structures that aren’t physically connected to the rental property, such as garages or sheds.

As a side note, Farmers also offers a tenant screening solution known as the SmartMove™ Solution, which makes it easier to screen new tenants through TransUnion. Plus, Farmers offers access to claims professionals 24 hours a day, and they’ll even send a Catastrophe Response Team to process claims on-site in some cases.

Why We Chose This Company: We chose Farmers for their willingness to insure rental properties with multiple units where many other providers focus on single-family homes.

Best for Commercial Coverage: American Family Insurance

Pros
  • Tailor your policy to your needs with select add-ons

  • You can beef up your coverage with flood insurance or an umbrella insurance policy

Cons
  • You may have trouble getting a quote for landlord coverage if you aren’t already a customer

  • You may need to pay more to have coverage on outbuildings on your property, including garages and sheds

American Family Insurance boasts an A rating for financial strength from both AM Best and Standard & Poor’s. The Madison, Wisconsin-based provider has been around since the 1920s, although its name and the type of insurance it sells have changed over the years. Today, American Family Insurance is known for its homeowners insurance, auto insurance, and commercial landlord insurance policies.

American Family Insurance offers landlord insurance that can be customized to meet your needs. With these policies, you’ll automatically get coverage for the rental structure you own and for general liability. Additional coverage can be purchased in the form of flood insurance and coverage for outbuildings like sheds, fences, and garages. You can also bundle your landlord insurance from American Family Insurance with a commercial umbrella policy that covers you for limits beyond what your landlord insurance policy offers.

You need to speak with an American Family agent and provide an array of personal information and information on your property to get a quote, which can make it difficult to shop around. However, American Family does offer discounts for landlords who bundle more than one policy with the company, including policies for other commercial properties or for the home you reside in.

Why We Chose This Company: We chose American Family Insurance as best for commercial insurance because they offer coverage specifically for commercial landlords, and you can easily tailor these policies to meet your business needs. Additionally, American Family's website gives you a number of tools and resources that are particularly useful to landlords.

Best for Multiple Properties: Foremost

Pros
  • Choose the types of coverage you want

  • Foremost will bundle all your rental property policies into a single landlord policy

  • Foremost has solid ratings for financial strength

Cons
  • Paying for full replacement cost coverage can cause your premium to rise

  • Plenty of other add-on coverage can increase your protection, but you’ll pay higher premiums in the process

While Foremost Insurance Group may not be a household name, this company does have excellent ratings for financial strength, including an A rating from AM Best. Foremost is part of Farmers Insurance Group of Companies, which is the nation’s third-largest personal property and casualty insurance company and the fifth-largest small business insurance carrier.

Landlord insurance from Foremost comes with comprehensive property coverage; named peril coverage that includes fire, explosions, windstorms, hail damage, and more; and optional replacement cost that can replace the full value of your property without deductions for depreciation. Uniquely, Foremost will bundle all rental properties into one single landlord policy for convenience and cost-effectiveness.

Other options include agreed loss settlement coverage, which provides you with a reimbursement if your property is destroyed by a covered peril. Policies automatically come with liability coverage that can protect you financially if someone is injured or their property is damaged on your premises.

Additionally, Foremost can protect for:

  • Loss of rents
  • Liability limits
  • Personal injury
  • Other structure
  • Repair cost
  • Water damage from sewers and drains

Being able to protect for all of this across different properties gives Foremost an edge for landlords who buy, sell, and hold multiple properties, as it helps to prevent any gaps in coverage.

Why We Chose This Company: Foremost builds one custom policy for you whether you have one rental property or 10. This makes it easy for landlords who buy, sell, and manage properties to always have the right protection.

Best for Single Family Homes: Travelers

Pros
  • Buy coverage for your commercial property, the land it sits on, and any outbuildings you own

  • Tailor your policy to your needs

  • Qualify for special discounts

Cons
  • Travelers scored well below average in J.D. Power’s 2019 U.S. Home Insurance Study

Travelers has an A++ rating for financial strength from AM Best, and the company has been around for more than 160 years. While they started as an accident insurance company in 1864, Travelers now offers coverage for automobiles, owner-occupied homes, and more, including specialty coverage like landlords insurance, renter’s insurance, and boat and yacht insurance.

Travelers provides landlord insurance for single-family homes and multi-family units, which helps you protect the building you own, plus any additional outbuildings. You can get coverage for damage and theft and premises liability, as well as for medical payments and also special insurance for loss of use.

General liability insurance is available, as well, and you can add an umbrella insurance policy to protect yourself even more. Travelers lets you buy what you need for your single-family rental or customize your policy to fit your specific needs.

Because the details of landlord insurance policies vary widely, you’ll need to reach out to a Travelers agent in order to get a commercial landlord property quote. Fortunately, Travelers offers a wide range of discounts for customers who bundle more than one policy or go without any claims for a specified time period.

Why We Chose This Company: Travelers Insurance offers traditional landlord insurance policies that work well for single-family homes and can be tailored to fit what you need and not what you don't.

What Is Landlord Insurance?

Landlord insurance is a type of insurance coverage that aims to protect property owners against losses that occur while they’re renting a property. This includes losses due to property damage, as well as loss of income if the property becomes inhabitable and unable to be rented. Landlord insurance also comes with liability coverage that protects the property owner if someone is injured on the property and requires medical care, or if you encounter legal costs as the result of an injury or incident. In addition to these basic inclusions, many landlords may buy additional flood insurance coverage or an umbrella policy that provides another layer of insurance coverage if they exceed the policy limits on their landlord insurance policy.

Note that, unlike traditional homeowners insurance policies, landlord insurance isn’t structured to provide coverage for personal property inside the home, such as electronics, clothing, and furniture. Renters who reside in your property are expected to purchase renter’s insurance that protects their personal property instead.

Common Landlord Insurance Exclusions

For the most part, landlord insurance intends to protect you from major losses caused by damage to your property. With that in mind, this type of insurance coverage does not cover updates or repairs to your rental property or regular maintenance you need to pay for while you own and maintain said property.

As mentioned, landlord insurance refrains from covering tenants' personal property within the rental or held on the rental property. Instead, your renters are expected to purchase renter’s insurance that will reimburse them for losses if their personal property is stolen or damaged.

Floods, earthquakes, and water damage caused by backups are also typically not covered by landlord insurance, although you can purchase additional flood insurance policies from most providers.

What Are the Expected Costs of Landlord Insurance?

The costs of commercial landlord insurance can vary depending on a wide range of factors, including:

  • The credit health of the applicant
  • The location and size of the property
  • The age of the property
  • The number of rental units on the property
  • Any outbuildings or additional structures on the property
  • Security features, such as smoke detectors, gates, and burglar alarms

Landlord insurance may or may not be more expensive than a traditional homeowners insurance policy, but a study of data conducted by HouseLogic noted that landlord insurance often costs 15% to 20% more due to the higher levels of liability involved.

To get a quote for landlord insurance, you’ll need to gather some information including your own personal details, the address of the property you want to insure, and the age and condition of the property you want to insure. Also note that you may be able to get a discount on landlord insurance if you are claims free or if you buy more than one policy from a single insurer.

What Are the Most Common Claims?

According to the Insurance Information Institute (III), property damage (including theft) accounted for 98.1% of homeowners insurance claims in 2017.

The Insurance Information Institute also offers information on the severity of claims, or the amount of money different types of claims cost. From 2013 to 2017, the most severe claims were for fire and lightning at $68,322, followed by bodily injury and property damage at $26,085. Water damage and freezing was the next most expensive claim at $10,234, followed by wind and hail at $10,182.

How to File a Landlord Insurance Claim

While the exact claims process for a landlord insurance policy depends on the provider, most modern companies give you the option to start a claim on the company website or using the insurer’s mobile app. To file a claim online, you’ll need to have information on the damage that has occurred and the date the damage or incident occurred, as well as your insurance policy number.

You may be able to start a claim by calling into your insurer’s claims hotline or by calling your insurance agent directly if you have one.

Once you file a claim, your insurance company will conduct an investigation to determine the severity of the claim and who may be at fault. They’ll evaluate the damage and determine an estimate of how much you’re owed for the claim. You’ll work with an insurance adjuster who will send you a check for your losses and answer any questions you may have.

How We Chose the Best Landlord Insurance Companies

We looked at more than 15 landlord insurance companies that offer policies nationwide and ranked them based on their financial strength, giving preference to companies with exceptional ratings from AM Best or Standard & Poor’s. We compared companies based on the standard coverage they include in their landlord policies, as well as the customer’s ability to tailor their insurance with special add-on coverage.

Finally, we gave preference to insurers that let you save money on landlord insurance when you bundle more than one policy with them, or when you go claims free for a specific timeframe.

Article Sources

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