Factors Affecting the Costs of Insurance for Rental Property

Insurance for rental property is a must-have for any landlord who plans to put up their property for rent. While you hand over your property to a tenant, you run several risks for your asset, and rental property insurance can give you peace of mind, at least financially. But before you buy an insurance policy for your rented property, you would think about how much premium you will have to pay for it. Actually, there are a number of factors that will affect your insurance cost. Here is a closer look into them.

Your Personal Belongings in the Property

Rental property insurance covers any personal assets you have left in the building. The more assets you leave there, the more you will have to pay for their insurance. So, assess them before availing of the required coverage.


This depends on the coverage you opt for. The insurance company will only pay the maximum amount of coverage you have chosen for your insurance. If your insurance claim exceeds that amount, you will have to pay for it from your pocket. If you opt for more coverage, you will have to pay more premiums, but you will be saved from paying money from your pocket when filing a claim.

Loss of Income Coverage

This is another key factor that affects the premium rate of your insurance policy. In case your tenants have to move out of the house due to a covered peril like fire, you will not get rent during that time, and your insurer will pay you the rent for that period. The higher rent you expect during this time, the more premium you will have to pay.


The deductible on your insurance policy is the key factor in determining how much you have to pay before your insurer enters and pays for the rest of the amount. The higher deductible you agree to pay, the cheaper premium you will have to pay for your insurance. This is because you will pay more from your pocket, and the insurer will pay less at the time of settling a claim.

Location of Your Property

The location of your rented property plays a great role in determining premium when buying insurance for a rental property. If it is located in a city with a high crime count, it will run more risks of theft and burglary, and you will have to pay more premiums for insuring it. If your property’s location is highly prone to natural disasters like floods and bushfires, then your premium rates will go high.

Type of Property

Consider what type of property you are planning to rent. Is it an apartment, a single-family home, a duplex, a mobile home, or any other type of property? Each property type has its risk factors, which can collectively affect your insurance premium rate. For instance, mobile homes have more risk of storm damage, while the apartment has more chances of getting damaged due to fire or water seepage sourced from the neighbors.

Extra Coverage You Want

Most rental property insurance policies offer standard coverage on the structure, owner’s assets, and loss of rental income. If you want some additional coverage for your property, such as for theft, burglary, fire, natural disaster, or any other damage, then you may have to pay extra for it.

There are several insurance companies that offer adequate insurance for a rental property. However, if you want to find the right one as per your requirements, preferences, and budget, speaking to an independent insurance agent would be the best bet for you. They will help you compare the different policies out there and find the right one at a competitive price for you.