What Landlord Insurance Costs, Line by Line

There is no national price for landlord insurance, and anyone who quotes one without seeing the building is guessing. There is a benchmark. In 2023 the average homeowners policy, the common HO-3 form, cost $1,737 a year, according to the National Association of Insurance Commissioners’ report published in July 2026. The Insurance Information Institute says landlord policies generally cost about 25% more than a standard homeowners policy. As a rough example, a house that would cost $1,737 to insure as your home might run about $2,170 as a rental. Your quote will depend on the lines below.

Why the average only gives you scale

The NAIC itself calls average premium an imperfect measure: hazards, economic conditions and property values vary widely from state to state, and even identical policies can be priced very differently across the country. Use the average to sense the size of the bill. Budget from real quotes.

Line 1: the dwelling limit

This is the biggest part of the premium. The limit should be what it would cost to rebuild the house, not what it would sell for. The land is not at risk from fire or wind, so insuring it wastes money. In the NAIC’s data, average premiums generally rise with the amount of coverage.

What moves the rate on that limit:

• Location. Wind, hail, wildfire, crime and how far the house is from a fire station.
• The building. Construction type, the age and material of the roof, the age of the wiring and plumbing.
• The form. A special form, which covers any cause not excluded, costs more than a basic named-perils form. Replacement cost costs more than actual cash value.
• Claims history. The property’s and yours. The Insurance Information Institute also notes that insurers increasingly use credit information to price homeowners policies.

Line 2: the deductible

The Insurance Information Institute says raising a homeowners deductible to $1,000 can save as much as 25%. The same trade works on a landlord policy: a higher deductible, a lower premium.

Coastal owners have a second deductible to plan for. Nineteen states and the District of Columbia have hurricane deductibles, which are a percentage of the insured value, typically 1% to 5%.

On a $250,000 dwelling limit, a 2% hurricane deductible is $5,000 out of your pocket on a hurricane claim, however small the damage.

Keep at least your largest deductible in your reserves.

Line 3: loss of rents

The price rises with the limit, and the limit is your rent times the months of cover you choose.

$1,800 a month × 12 months = a $21,600 limit. Choose the months from how long a major repair takes where you are, not from the smallest number on the quote.

Line 4: liability

The driver is the limit you choose, then the property: the number of units, a pool, a trampoline, a dog, the condition of stairs and walks. An umbrella policy adds a layer above it, priced separately, and insurers usually want a set amount of liability underneath first.

Line 5: flood

A separate policy with its own price. The National Flood Insurance Program prices each building on its own flood risk: how often floods happen there, the kinds of flooding, the distance to water, the building’s elevation and the cost to rebuild. Its building coverage goes up to $250,000 for a residential building, contents to $100,000, and a new policy usually starts 30 days after purchase.

Line 6: earthquake

Also separate. Its deductible is a percentage of the policy limit, usually 5% to 15%, according to the Insurance Information Institute, which makes the deductible choice more important than the premium.

Line 7: add-ons

Ordinance or law, water backup, equipment breakdown and a vacancy endorsement each add a charge. The drivers are the limit you choose and the age of the building: ordinance or law coverage matters most, and costs most, on older houses built to older codes. The guide to the 10 landlord coverages explains what each one does.

Discounts

• More than one policy with the same insurer. The Insurance Information Institute puts the discount at 5% to 15% with some insurers.
• Protective devices. Monitored smoke and burglar alarms, a new roof, updated wiring.
• A clean claims record. Small claims you could have paid yourself can cost more in later premiums than they returned.

What a premium change does to your returns

Insurance is an operating expense, so it comes straight out of net operating income, and NOI sets what a rental is worth to a buyer.

A duplex rents for $1,400 a unit, $2,800 a month. Allow 5% vacancy; property tax is $350 a month, repairs $280, and the owner pays $100 a month for water. At renewal, the insurance quote rises from $2,400 a year to $3,000, an example increase.

Rent $33,600 − vacancy $1,680 = $31,920. Expenses before: $4,200 tax + $2,400 insurance + $3,360 repairs + $1,200 water = $11,160, for an NOI of $20,760. After: $11,760, for an NOI of $20,160.

On a $325,000 value, the cap rate slips from 6.39% to 6.20%. Held at 6.39%, the $600 of lost NOI is about $9,400 of value.

The NOI calculator shows the new NOI line by line, and the cap rate calculator the new rate.

That math cuts both ways. Shopping the policy every year with identical limits is one of the few ways to raise a property’s value from a desk. Cutting coverage to do it is not: a flood you did not insure costs more than any premium.

Keep the cost down without going short

1. Quote every renewal, with the same forms, limits and deductibles, so the prices compare.
2. Raise the deductible to what your reserves can pay, and hold the reserve.
3. Fix what insurers price: an old roof, old wiring, a water heater past its life.
4. Require renters insurance with liability in the lease, so a tenant’s kitchen fire has a policy behind it, and keep the security deposit for what it is for.
5. Deduct it. IRS Publication 527 treats rental insurance premiums as a deductible expense; a premium paid for more than one year ahead is deducted a year at a time.

This is general information, not insurance, tax or legal advice. The figures above are national averages and worked examples; your quotes are the numbers that count.