Landlord Insurance: What It Covers and Costs

Landlord insurance is a specialized type of coverage for property owners who rent out a room, apartment, or entire house to tenants. Often called rental property insurance, it differs from standard home insurance in several important ways—most notably by offering protection for loss of rental income if your property becomes temporarily uninhabitable due to a covered event.

Landlord insurance vs. home insurance

Home insurance is designed to protect an owner-occupied dwelling, while landlord insurance is tailored to the risks faced by someone who rents property to others. The distinction matters especially when you rent part of your own home or own a separate rental property, because coverage, limits and exclusions can change when tenants are involved.

Does your home insurance cover you if you rent out part of your home?

In some cases, a standard home insurance policy can be sufficient when you rent a portion of the property you occupy—such as a basement suite. Typical home insurance covers the dwelling, detached structures on your property, the homeowner’s personal property (not the tenant’s belongings), and liability for injury or damage you, your family or your pets cause to others.

Coverage and cost depend on the policy type you choose:

• Comprehensive: Protects against a wide range of sudden and accidental perils such as fire, lightning, theft, falling objects, wind, hail, and explosions.
• Broad: Similar to comprehensive but with more exclusions or limitations; coverage for contents is often limited to perils explicitly listed in the policy.
• Basic: Covers a narrower list of perils, typically including fire, wind and theft.

Even comprehensive policies have exclusions. Commonly excluded risks include sewer backups, water damage, overland floods, storm surges, earthquakes, landslides and avalanches. You can often add endorsements (riders) to cover these perils if you live in a vulnerable area. Likewise, many policies set upper limits for valuables like artwork, jewellery and specialized sports equipment; a rider can raise those limits.

When someone outside your immediate family lives in your home, insurers see that as increased exposure. Always inform your insurance broker or agent if you plan to rent part of your home so they can confirm whether your existing policy remains adequate or whether you should adjust coverage.

Do you need landlord insurance? What does it cover?

If you own a separate property that you rent to tenants, landlord insurance is usually the appropriate policy. Landlord insurance reflects the higher risk of renting a dwelling you do not occupy. Typical landlord coverage—often described as a fire and extended coverage policy—limits personal property coverage to items that remain with the unit between tenants, such as appliances, window coverings and fixtures. These landlord-owned contents limits are usually lower than the limits found in an owner-occupied home insurance policy, commonly in the range of $10,000 to $20,000 depending on the insurer and the property.

Landlord insurance generally covers the building structure, landlord-owned appliances and fixtures, and liability for incidents that occur on the property for which the landlord is responsible. It does not cover tenants’ personal belongings; tenants should carry their own renters or tenant insurance for their possessions and personal liability.

Two important endorsements to consider are sewer backup and water damage coverage (often sold together) and loss of rental income coverage. Loss of rental income coverage helps replace rent you lose if the property becomes uninhabitable because of a covered peril, such as fire. The premium for rental income protection is typically based on the amount of rent you collect; many landlords can expect to pay a modest annual fee for this endorsement, often ranging from tens to a few hundred dollars depending on total rental income and insurer.

Does landlord insurance cover a tenant’s property?

No. Landlord insurance only covers the landlord’s property and liability exposure. Tenants must obtain their own tenant or renters insurance to protect their personal belongings and provide personal liability coverage—for example, if a visitor is injured in the tenant’s unit and decides to bring a lawsuit. While tenant insurance is not legally mandatory, many landlords require proof of coverage as a condition of the lease. Requiring tenant insurance reduces the risk that a tenant’s lack of coverage will shift liability or claim exposure to the landlord.

About tenant insurance

Tenant insurance typically covers a tenant’s personal property against perils listed in the policy and provides personal liability coverage. Landlords should encourage or require tenants to obtain a policy so both parties are better protected.

Can I cancel landlord insurance if I have no tenants?

Notify your broker or insurer immediately if your rental property becomes vacant—even for a short period. Vacant homes carry higher risk: heating may be shut off and pipes can burst in colder months, and vacant properties can attract theft or vandalism.

Many insurers offer a short-term vacancy permit or endorsement to bridge gaps between tenants. This permit typically applies for a limited window (for example, up to 90 days) and involves an additional charge to cover the extra exposure while the property is unoccupied. Stay in close contact with your broker to ensure you remain properly covered while searching for a new tenant.

If you plan to use the property for short-term rentals (such as through a short-stay platform) between long-term tenants, discuss this with your broker. Short-term rentals may require different or additional coverage than a standard long-term landlord policy.

Further reading about home and rental insurance

• Insurance for landlords: A practical guide to protecting rental properties
• Home insurance and climate risks: Coverage considerations for wildfires, floods and other extreme events
• Your complete guide to home insurance: Types of coverage, common exclusions and how to choose
• What to know about insurance claims after flooding or other water-related damage