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Rent out a house and your homeowners policy no longer fits. Landlord insurance, usually written on a dwelling policy form such as a DP-3, is built for a tenant-occupied home. According to the Insurance Information Institute, a landlord policy typically costs about 25% more than a homeowners policy on the same property. On a home that would cost $2,000 a year to insure as an owner-occupied residence, expect roughly $2,500 a year as a rental, before local factors move the quote either way.
Why the 25% premium exists
Tenants file more claims than owners on average, and they have less reason to catch a slow leak or a failing water heater early. Landlord policies also carry coverage homeowners policies lack, mainly loss of rental income. If a covered fire puts tenants out for three months, the policy can replace the rent while repairs run. That coverage, plus broader liability exposure from people living in a house you own but do not control day to day, is what the extra premium buys.
What a dwelling policy covers, and skips
A landlord policy covers the structure, other structures such as a detached garage, your liability, and the limited property you keep at the rental, such as appliances you own and maintenance equipment. It does not cover the tenant’s belongings. Their furniture, clothes, and electronics fall under their own renters policy, which is why many leases require tenants to carry one. Our comparison of renters insurance vs landlord insurance maps out who covers what, loss by loss.
What moves a landlord quote
Location and rebuild cost set the base, just as they do for homeowners coverage. After that, tenant type matters: long-term leases price lower than short-term vacation rentals, which often need a different policy or endorsement entirely. Older rentals with dated electrical or plumbing price higher. Multiple rentals under one insurer can earn portfolio pricing. The deductible choice works the same way as on a homeowners policy, as our deductible guide explains.
The tax and paperwork side
Landlord premiums are generally deductible as a rental business expense, which softens the 25% difference for many owners at tax time. Tell your insurer the moment a home changes occupancy in either direction. A claim on a tenant-occupied home insured as owner-occupied can be reduced or denied, and that single disclosure is worth more than any premium saving from staying quiet. If you are comparing rental coverage with the cost of insuring your own home, the 2026 homeowners cost guide gives you the baseline to apply the 25% rule to.
