You'll need a standard homeowners insurance policy to protect a home you live in full time or rent out once or twice a year. But if you plan on renting out your house or second home for an extended period of time, you’ll need landlord insurance — also known as rental property insurance. Landlord insurance offers additional coverage that home insurance doesn't, including loss-of-rental-income protection in case your tenants need to move out temporarily due to a covered loss.
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Landlord insurance vs. homeowners insurance
The biggest difference between landlord insurance and homeowners insurance is whether personal property and loss-of-use coverage are included.
Coverage | What does it cover? | Landlord insurance | Homeowners insurance |
|---|---|---|---|
Dwelling coverage | Structure of your home | Included | Included |
Other structures coverage | Structures on your property that aren’t attached to your home | Included | Included |
Personal property coverage | Personal belongings, like furniture, clothing, & electronics | Not included | Included |
Loss-of-use coverage | Additional living expenses, like hotel stays and restaurant meals, if you need to live elsewhere after a covered loss | Not included | Included |
Loss-of-rent coverage | Loss of rental income if your home needs extensive repairs and your tenants have to temporarily move out | Included | Not included |
Personal liability coverage | Legal, medical, & repair bills if someone's injured or their property's damaged and you’re found legally responsible | Included | Included |
Medical payments coverage | Small-dollar medical bills if someone's injured on your property | Included | Included |
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Dwelling and other structures coverage
Both homeowners insurance and landlord insurance provide coverage for the physical structure of the home, as well as detached structures on the property. This means if your primary residence or rental property are damaged by a covered loss, such as a fire or windstorm, your insurance will pay to repair or rebuild the property. It will also pay to repair detached structures like gardening sheds or fences.
Personal property coverage
Homeowners insurance offers personal property coverage, while landlord insurance doesn't. Tenants are responsible for purchasing rental insurance to insure their personal belongings in your rental home.
Loss-of-use and loss-of-income coverage
Homeowners insurance includes loss-of-use coverage, which pays for additional living expenses like hotel stays and restaurant meals if your home is damaged due to a covered loss and you need to live elsewhere while it's being repaired.
But with landlord insurance, this type of protection is known as loss-of-income coverage. This reimburses you for lost rental income if your rental property is damaged by a covered peril and your tenants need to move out temporarily.
Personal liability and medical payments to others coverage
Both homeowners insurance and landlord insurance include protection if a guest is injured in your home and you're found legally responsible. Personal liability coverage pays for legal, medical, and repair bills if someone is injured or their property is damaged in your home or rental property and you're liable. Meanwhile, medical payments to others coverage pays for small-dollar medical bills if someone is injured on your property — regardless of who's at fault.
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Is landlord insurance more expensive than homeowners insurance?
Landlord insurance is on average 25% more expensive than homeowners insurance, according to the Insurance Information Institute (III). [1]
With the average cost of homeowners insurance around $1,754 a year, that would bring the cost of landlord insurance to around $2,192 per year, according to our analysis of 2022 homeowners insurance rates across the county.
How to decide if you need landlord insurance or homeowners insurance
Whether you need landlord insurance or homeowners insurance depends on how much time you spend at the property you're insuring.
You'll need landlord insurance if the property is rented out for the majority of the year.
However, if your home is only rented out part of the year and is vacant for more than 30 or 60 days, you'll likely need to purchase a separate vacant and unoccupied homeowners insurance policy.
You'll need homeowners insurance if the property is your primary residence.
This type of insurance may also suffice if you rent out a room in your home just a few times a year, like during a holiday or major sporting event. However, you'll likely need to add a home-sharing endorsem*nt to your standard home insurance policy. This protects your home from damage caused by covered perils as well as liability incidents if it’s rented out on a home-sharing site like Airbnb or Vrbo.
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Frequently asked questions
How much more is landlord insurance than homeowners insurance?
Landlord insurance is typically around 25% more expensive than homeowners insurance, according to the Insurance Information Institute.
Is landlord insurance the same as building insurance?
Landlord insurance covers an individual unit you're renting out, while building insurance covers a building that has multiple units and tenants living there.
Do I need both landlord insurance and home insurance?
You typically won't need both landlord insurance and home insurance for a single property. However, if you have a primary residence as well as a vacation home that you rent out the majority of the year, then you would need a home insurance policy for your permanent home and a landlord policy for your vacation home.
