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What Kind of Insurance Do I Need for My Rental Property?

By April 29, 2020No Comments

Investing in real estate has proven to be lucrative, no doubt. As a matter of fact, many of the world’s wealthiest people have amassed their wealth solely from it. When done right, investing in real estate can help provide
you with a regular income stream for years to come. That said, just like any other investment, you have to do your due diligence first as an investor.

“Among other things, you need to find the right property, buy in the right location, and understand what property management entails” points out John Hass of Haas Properties. “But it shouldn’t end there. You also want to protect your property against any potential damage
by getting the right insurance policy. After all, the purchase is a huge financial undertaking that you wouldn’t want to blow away overnight.”

So, what kind of insurance should you get for your rental property? Jeffery Sullivan, Agency Principal of Applegate Insurance Agency, Knoxville, TN will provide the insight and guidance.

Landlord Insurance Vs. Homeowner’s Insurance

However, if you are planning to rent out your home for an extended period of time, then you need a different type of protection. If you have a rental property, getting a landlord’s insurance policy will
help you get additional protection against common risks.
A typical landlord insurance will help provide cover against:
 Acts of nature: Do you live in areas that prone to perils such as tornadoes, hurricanes, and
earthquakes? If you do, then a landlord insurance cover is a must.
 Sewer & Drain Back up” This is specific to offering protection against damage resulting from water. Water
damage can come in different forms, including negligent plumbing issues, rain, or busted
 Loss of income: Some policies may even allow you to continue getting income from your
property even after a disaster strikes and you no longer have tenants. Of course, this
would be only available for a limited period of time.
 Personal property: Do you offer rental premises that are furnished? If so, then you would
be eligible to get compensation for any damage or theft involving personal items such as
curtains or light fixtures.
 Dwelling coverage: This will help cover any structural damage resulting from things like
fire, vandalism, or built-in appliances such as the water heater.

According to, expect to pay 15% to 20% more for landlord insurance than you
did for homeowner’s insurance. This averages to around $822 per year.

Airbnb coverage Vs. Homeowner Insurance

Are you planning to rent out your home for a single occasion with Airbnb for instance to coincide with a
big upcoming festival in your town? If so, then your existing homeowner’s policy will NOT suffice.  A
standard homeowner’s insurance policy does NOT include this in the coverage forms. You must call your agent to obtain a special type of policy or add the airbnb endorsement to cover this type of risk.

Annual Cost: More expense than a standard homeowner policy

When Do You Need Landlord Insurance?

The following are a few questions your insurance company may ask you to determine whether or
not you need one:
 Will the rental property be furnished?
 Whose responsibility will it be to find tenants?
 Whose responsibility is it to maintain the property?
 When the property isn’t rented out, will it be vacant?
 Will you need your tenants to obtain a renter’s insurance?
 Will you require tenants to sign a lease?
 How often do you intend to rent out the property?
How you answer these questions will help your insurance company determine whether or not
you need landlord insurance.

What is a Renter’s or Tenant’s Insurance?

To begin with, both terms essentially mean one and the same thing. You can use the two terms
interchangeably. As the name alludes, a tenant’s insurance is for tenants. Basically, a renter’s
insurance protects the belongings of tenants against theft and many forms of damage.

BEST PRACTICE: Always require your prospective tenants to show you proof that they a Renter’s Insurance policy before they can sign the lease.The following are a few ‘perils’ that a renter’s insurance covers.

 Medical payments: It can help insure a tenant against any financial liability that may
result from a tenant getting injured while on the property.
 Additional living expenses: This is also referred to as loss of use coverage. With this
coverage, your tenant’s expenses may get covered in the event the property becomes
 Personal liability: If someone is injured, or their property is damaged, and you are blamed
for the event, this policy can help cover any ensuing liabilities up to $100,000.
 Personal property damage: This policy will cover any damages resulting from a covered
peril. Common perils include theft, wind or fire.

ANNUAL Cost: A renter’s insurance is usually quite affordable . Your tenant can expect to pay anywhere between
$100 and $250 per year on average.


There you have it. Everything you need to know about what kind of insurance policy you may
need for your rental property in Georgia, Tennessee or North Carolina. If you need more help, please seek professional assistance from your insurance agent or call Jeffery Sullivan, Applegate Insurance Agency at 865-240-2348.