If you own a condo and want to rent your place out, condo landlord insurance may offer the best coverage. It can protect you from liability, rental income loss, and certain property damage.
Condo associations typically insure the building with a master policy to cover assets like the roof, basement, elevator, boiler, walkways, and common areas.1 Most associations require live-in owners to buy condo insurance to cover their part of the structure, but owners may need extra coverage to rent out their condos.
Here’s what you need to know about landlord insurance for condos, including how it works and what it covers.
Condo landlord insurance is for property owners who rent out their condos as long-term rentals. It’s not for owner-occupied homes. If you’re offering vacation or short-term rentals, you technically have a business, so you’ll need a hotel or bed and breakfast policy, according to the Insurance Information Institute (Triple-I).2
You can typically add landlord insurance to a condo insurance policy as additional coverage. Unlike a typical condo insurance policy, a landlord policy includes loss-of-income coverage if tenants need to move out following a covered incident resulting in damage.
If you plan to rent out a vacation home or investment property long-term, you’ll likely need a condo landlord insurance policy. You don’t legally need to buy condo landlord insurance, but your lender may require it if you’re financing the property.
Landlord insurance can protect your investment by covering damage to the building interior, certain personal property, and liability. Some insurers may offer extra coverage options, but here’s what condo landlord insurance typically includes.
This covers physical damage to the condo interior from covered perils. Dwelling insurance can cover wall finishes, floor coverings, fixtures, and more. Your condo association’s master policy would cover damage to shared areas and parts of the condo’s structure.
Other structures coverage extends to additional buildings, like a shed or detached garage.
Landlord insurance covers damage from specified perils to the personal property you’ve left on-site for maintenance or tenant use, such as appliances, lawnmowers, and snowblowers. It doesn’t cover typical wear or repairs for those items.
This covers you if your tenant or one of their guests incurs an accidental injury while on your property. Liability coverage can help cover legal fees, settlement costs, and medical expenses.
Loss of use insurance covers you losing your rental property income if your condo becomes unlivable. Most policies will reimburse you for the lost income while you repair the damage if a covered peril damages your condo and tenants have to leave or you can’t rent it out.
Your dwelling, personal property, and loss-of-income coverage will kick in to cover damages or losses from covered events. Condo landlord insurance typically covers the same perils a condo or homeowners insurance policy covers.
Commonly covered perils include:
Most insurers offer optional coverages you can purchase. Depending on your risk, local weather patterns, and building age, you may want to consider one or more of these coverages.
Not all damage qualifies as a covered loss. Policies will either include a list of covered perils or a list of specifically excluded perils.
Your coverage will rarely cover the following perils:
Floods and earthquakes: Typical condo insurance doesn’t cover damage from flooding and earthquakes, so you’ll need to purchase this extra coverage through state or private insurers.
Water and sewer backup: You’ll need extra coverage to insure your condo for damages from drain and sewer overflows and backups. A flood policy doesn’t cover this unless the damage specifically occurs because of a flooding event.3
Pest infestations: Landlord insurance doesn’t cover damage from termites, rodents, or other typical pests.
Maintenance and equipment breakdowns: If the furnace or appliances break or the roof deteriorates due to wear, your insurance won’t cover the repair costs.
Tenant belongings: Landlord insurance doesn’t cover tenants’ personal property. Tenants must purchase rental insurance to protect their belongings.
Eviction: Landlord insurance doesn’t cover eviction costs, and most insurers don’t sell eviction coverage. That said, some companies do offer this coverage.
The two most important parts of landlord insurance are dwelling and liability coverage. How much you should buy depends on your finances and risk.
Generally, insurers recommend having enough dwelling coverage to completely rebuild or renovate your property back to its original condition if a covered peril destroys it. Your condo association may even require this.
Liability coverage is a bit more complicated. Your risk can vary widely depending on the number of condos you’re renting out and the number of tenants you have.
Before you choose a policy, consider your unique needs. Compare quotes and talk to your insurance agent to determine your property’s best insurer and coverage level.
Landlord insurance costs about 25% more than a standard homeowners insurance policy, according to Triple-I. The national average cost of condo insurance for a $200,000 dwelling is $1,426 per year, according to Insurify data. Accounting for a 25% increase, condo landlord insurance policies in that dwelling would cost $1,783 on average.
Premiums vary widely by state and insurer, so comparing quotes will help you find the best policy.
The table below breaks down the cheapest condo insurance by state with $200,000 of dwelling coverage.
Numerous factors affect condo landlord insurance premiums, from local crime rates to your chosen deductible.
Environmental factors include:
Natural disaster risk: If your condo is in a region prone to hurricanes or wildfires, you’ll pay higher premiums to account for that risk.
Crime rates: Higher levels of burglary or arson in your property’s area could mean more expensive landlord insurance.
Proximity to a fire station: The closer you are to a fire station, the faster firefighters can put out an unexpected fire, minimizing damage and expensive claims.
Building age, condition, and features: Older structures in bad condition can be costly to maintain and a liability risk. Building materials, amenities, features, and replacement costs also factor into insurance premiums.
Personal policy factors include:
Deductible amount: Choosing a higher deductible will lower your monthly premiums, but you’ll have to pay more up front if damage occurs.
Level of coverage: The more coverage you have, the more you’ll pay for your overall premium. If you need extra liability, vandalism protection, or other additional coverages, it’ll cost more than a basic policy.
Number of properties: Renting out multiple condos increases your risk of property damage and rental loss, leading to higher landlord insurance premiums.
Rental amount: Condo landlord insurance covers rental income loss, so you’ll likely pay more in premiums if your rental income is higher.
Claims history: Many insurers consider past claims, so if you have a history of frequent or costly claims, you could face higher rates.
Before purchasing condo landlord insurance, consider your finances and unique coverage needs. Follow these steps to find the right policy for you:
Determine how much coverage you need. Think about what the master condo association policy doesn’t cover, any other structures you want to insure, and the right personal liability coverage amount.
Decide on your ideal deductible. Consider your budget to figure out how much you can cover out of pocket when damages occur. If you set a higher insurance deductible, you can pay lower premiums.
Collect details about your condo. You’ll need to share the building age, area, materials, and more with the insurer to get an accurate quote.
Compare quotes from insurance companies. Landlord insurance premiums depend on numerous factors, so shop around to find the best discounts and rates for the coverage you need.
Buy your condo landlord insurance policy. You’ve done your research, but be sure to read and understand your policy details before completing your purchase.
Landlord insurance is often a necessary investment if you want to rent out your property. The following information can help answer your remaining questions about condo landlord insurance.
Renters insurance covers tenants’ personal property in the event of accidents, weather events, theft, and vandalism. Renters insurance can also cover some living expenses if tenants have to move out after a covered peril. Condo landlord insurance protects parts of the building interior, certain landlord belongings, and liability.
HO-5 homeowners insurance provides coverage on buildings and personal property for all risks unless specifically excluded in the policy, according to the National Association of Insurance Commissioners.4 HO-6 insurance is specifically for condos or co-ops and provides coverage on personal property and certain parts of the building for any losses named in the policy.
No. State law doesn’t legally require condo landlord insurance, but your lender may require you to buy it if you’re financing the rental unit. Condo associations typically require owners to have condo insurance and may require a landlord policy.
Condo landlord insurance doesn’t cover tenants’ property. For example, if a fire damages the condo, landlord insurance will cover interior structural damage but not damage to a tenant’s personal belongings. Condo landlord insurance does cover your liability if a tenant incurs an injury. It can pay for medical bills and settlements.
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