You have insurance for your car, health, and home – so why not also insure your rental property with landlord insurance?
Taking out insurance policies helps ease our minds about critical things in our everyday lives, knowing that we have protection against expensive disasters. It’s no different when being a landlord in California!
With a landlord insurance policy, you can rest easy knowing that your rental properties are protected from environmental damage, rent loss, and more.
So, we know that insuring your rental investment and business is crucial, but how much does landlord insurance cost in California?
By the end of this article, you’ll know the average cost of landlord insurance in California, what factors influence this price, and what landlord insurance covers.
What is Landlord Insurance?
Before we dive into the price details of landlord insurance in California, let’s get familiar with what exactly landlord insurance is.
Landlord insurance is an insurance policy that specifically protects rental properties from damage and the liability of rental property owners and landlords.
How Much Does Landlord Insurance Cost in California?
The cost of landlord insurance depends on many factors. However, the average landlord in California pays $1,700 per year for landlord insurance coverage. This is about 20-30% higher than homeowners insurance in the US.
Of course, this could amount varies depending on your rental property.
What Influences the Cost of Landlord Insurance?
There are many types of insurance policies available for landlords. Each differs in coverage and benefits, which can influence the cost. However, other factors can determine the cost of your landlord insurance in California.
Property Size
The size of your property will factor into how much your landlord insurance policy will cost.
The cost to insure a studio apartment will be much less than insuring a three-story multi-family property. There is just so much more space to protect with larger homes, raising the price of the policy.
Location
The location of your rental property will also influence the price of your landlord insurance.
If your rental property is located in an area with increased crime rates, especially for home break-ins, then you can expect to pay more for your insurance policy.
Crime isn’t the only location factor, though. Environmental factors also influence the cost. If natural disasters, such as tornadoes, wildfires, or flooding, are common in the area, then the insurance policy may be more expensive.
Property Value
The overall value of your property is another major indicator of the cost of landlord insurance. Factors such as the age, condition, and last appraisal of the property will be considered for your landlord insurance price.
Tenant Type
Even the types of tenants you lease your rental property to can influence the cost of landlord insurance in California.
If you’re renting to short-term tenants, you can expect higher insurance costs because the property requires more maintenance and is more prone to tenant damage.
This is also true if renting to college students.
However, if you decide to rent to long-term tenants, which is highly recommended for landlords who want to maximize their ROI, then landlord insurance costs can be less.
Level of Coverage
There are many types of landlord insurance coverage options. Depending on the level of coverage you feel is necessary to protect your investment and rental property business, you could pay more for your insurance policy.
Balancing the cost with the coverage available is an important part of the decision process when purchasing landlord insurance.
What Does Landlord Insurance Cover?
Many rental property investors confuse landlord insurance with homeowners insurance. While landlord insurance may overlap with your homeowners insurance policy, it also covers liabilities that are unique to renting to tenants.
So, what exactly does landlord insurance cover?
- Dwelling and Structures – Landlord insurance covers damage caused to the rental property or any other structures on the property.
- Loss of Rent – You’ll be covered for any rent lost due to property damage from environmental factors or fire that prevents the property from being habitable.
- Liability – The landlord is covered for any liability claims that take place on the property, such as if a tenant or a guest is injured on the property.
- Medical Expenses – If someone does get hurt on the property, landlord insurance may cover medical expenses related to the injury.
- Personal Property – Landlord insurance could cover damage to personal property in the rental due to fire or environmental events. However, it’s a good idea to also require tenants to have Renters Insurance for this as well.
Depending on the landlord insurance policy you choose, it could offer more or less coverage. It’s important to find a policy that meets your needs and expectations as a landlord.
Is Landlord Insurance Required in California?
Legally, landlord insurance is not required in California – but it is highly recommended!
Taking out a landlord insurance policy offers the peace of mind serious property investors and landlords need. You’ve just made a huge investment in a rental property, now it’s time to invest in insuring and protecting it from events that are completely out of your control.
Investing in landlord insurance can help you maximize your rental property investment, ensuring your repairs are covered and you don’t suffer from loss of rent due to these disastrous damages.
Properly Protect and Manage Your California Rental Property with Inveserve Corp
Landlords can do more than find a comprehensive landlord insurance policy to protect their real estate investment. Many choose to work with a reliable property management company to ensure proper management and maintenance of their rental.
Inveserve Corp is the San Gabriel Valley area’s leading property management company! For the last three decades, we have helped rental property owners like yourself maintain, manage, and maximize their real estate investment in Southern California.
Curious to see how much you can earn from your California rental property?
Request our free rental analysis to get started!
