Landlord Insurance in 2026: What to Actually Buy When Rates Are Up 30%

Why Premiums Doubled

If your landlord premium has not been re-quoted since 2022, you are almost certainly overpaying — or under-covered, which is worse. The Insurance Information Institute's 2025 data shows landlord policies up 28-42% on average since 2022, driven by reinsurance costs, climate exposure in Florida and California, and inflation in construction labor. In Florida, Citizens Property Insurance has become the carrier of last resort for tens of thousands of rentals as private carriers have non-renewed. In California, State Farm and Allstate have paused new policies in several wildfire-exposed zip codes.

The Three Policy Types

• DP-1 (Dwelling Property Basic): Named-peril only, usually actual cash value. The cheapest tier and the one most likely to leave you under-covered. Avoid unless you cannot get a better policy.
• DP-3 (Dwelling Property Special): Open-peril for the structure, named-peril for contents, usually with replacement cost. This is the standard for self-managing landlords and what you should be quoting first.
• HO-3 (Homeowners): Designed for owner-occupants and not appropriate for a non-owner-occupied rental. If your agent tries to sell you one, find a different agent.

The Five Line Items Worth Fighting For

1. Replacement cost vs. actual cash value. ACV depreciates everything before paying out — a 15-year-old roof that needs replacement at $18,000 might pay $4,000 on ACV. RC pays the actual cost to replace. The premium difference is typically 10-15%; the claims difference is enormous.
2. Loss of rents coverage. If a fire makes the unit uninhabitable for six months, your mortgage is still due. Loss of rents pays the rent you would have collected. Typical limit is 12 months; do not let it drop below 6.
3. Liability coverage of $1M minimum. A tenant slips on icy stairs, a guest is injured by faulty wiring — these are six-figure suits. $1M is the floor. Pair it with a $1-2M personal umbrella policy that covers your rental schedule.
4. Ordinance or law coverage. When a building is significantly damaged, current codes apply to the rebuild. If your 1968 duplex burns, code requires modern electrical, plumbing, and sometimes egress. Ordinance or law endorsements pay this gap; otherwise you pay it.
5. Water backup endorsement. Sewer backups and sump-pump failures are explicitly excluded from standard policies. The endorsement is usually $50-$150/year and is the single most common claim I see paid.

What You Probably Do Not Need

Earthquake and flood are not in standard landlord policies and require separate placements (CEA in California, NFIP for flood). Whether to buy them is a math problem driven by your specific zip code's hazard map. For most non-coastal, non-California landlords, the answer is no. For coastal Florida and California Bay Area landlords, the answer is almost always yes.

The Carrier List That Still Writes in 2026

• Steadily, Honeycomb, and Obie — three insurtechs specifically built for landlords; usually competitive nationwide.
• Foremost (Farmers) and Lemonade — older players still writing landlord policies in most states.
• Liberty Mutual and Travelers — competitive in low-CAT-risk states; have pulled back from coastal exposure.
• State-run insurers of last resort — Citizens (FL), CEA (CA), Coastal Insurance (NC) for areas where private carriers have exited.

The Tenant Insurance Requirement

Requiring tenants to carry a renter's policy with at least $100K in personal liability and naming you as an "additional interest" should be in every lease. The cost to the tenant is $12-$20/month in most markets. The benefit to you is that small tenant-caused incidents (kitchen fire, water damage to a neighbor) get handled by their carrier instead of your deductible. About 65% of landlords require it; the holdouts almost always wish they had after the first claim.

The Audit Worth Doing Every Two Years

Reshop the policy every two years. Not every year — carriers penalize jumpers — but every two. Get three quotes through an independent agent who can write multiple carriers, not a captive State Farm or Farmers agent. The difference between the cheapest and the third-cheapest quote is typically 15-25%, and the cheapest is not always the best — read the exclusions before you switch.

Insurance is one of the few line items where a bad decision can wipe out a property's profits for a decade. Spend two hours on it every two years; it pays better than any rent bump you will ever negotiate.