Factors that influence the cost of landlord insurance

If you rent out a house, duplex, or condo, your regular homeowners policy probably isn’t the right fit anymore. Once a tenant moves in, you need landlord insurance (often called a “dwelling fire” or DP-3 policy). Landlord insurance usually costs more than a homeowners policy on the same property.

That raises two good questions: why does it cost more, and what can you control? Let’s walk through it.

First, What Does Landlord Insurance Cover?

Every policy is different, but most landlord policies include:

• The building itself. The structure, roof, and attached features like a deck or garage, protected against covered losses like fire, wind, and hail.

• Other structures. Detached items like fences, sheds, or a detached garage.

• Your property inside the rental. Items you own and provide for tenants, like appliances or lawn equipment.

• Lost rental income. If a covered loss makes the home unlivable, this helps replace the rent you would have collected while repairs are made.

• Liability. If someone is hurt on the property and you’re found responsible, this helps with medical bills, legal defense, and settlements.

What it typically does not cover:

• Your tenant’s belongings. That’s what renters insurance is for, and it’s smart to require it in your lease.

• Flood. Flood is excluded and requires a separate flood policy.

• Earthquake. This is usually excluded but can often be added.

• Wear and tear, neglect, and pest damage. Insurance is for sudden, accidental losses, not maintenance.

8 Factors That Affect Your Premium

1. Location and Weather Risk

Where your property sits matters a lot. In the Kansas City metro, hail and wind are big drivers of insurance costs, and roof claims are some of the most common we see. Properties in areas with frequent severe storms tend to cost more to insure.

2. Age and Condition of the Roof

Your roof is one of the biggest pieces of the pricing puzzle. A newer roof can mean a lower premium. An older roof may mean higher rates, a separate wind/hail deductible, or coverage that pays based on depreciated value.

3. Updates to Major Systems

Insurance companies want to know about the electrical, plumbing, and heating systems. Older homes with original wiring or aging plumbing carry more risk. Updates can make a real difference in what you pay.

4. Cost to Rebuild

Your premium is based on what it would cost to rebuild the home, not its market value. Larger homes, custom features, and higher-end finishes cost more to replace, so they cost more to insure.

5. Your Deductible

This is one of the easiest levers to pull. A higher deductible lowers your premium, but make sure it’s an amount you could comfortably pay out of pocket if something happened.

6. Rental Income

Because your policy can replace lost rent after a covered loss, higher rents can mean a higher premium for that coverage.

7. Liability Limits and Extra Coverage

Higher liability limits and added coverages cost more, but they’re often worth it. For landlords with several properties, an umbrella policy is an affordable way to add an extra layer of liability protection.

8. Claims History and Fire Protection

Past claims on you or the property can raise your rate. Distance to the nearest fire station and fire hydrant can also affect pricing, since quicker emergency response means less potential damage.

How to Keep Your Costs Reasonable (Without Cutting Corners)

• Keep up on maintenance, especially the roof, gutters, and anything involving water.

• Choose a deductible that balances savings with what you can afford.

• Require renters insurance from your tenants.

• Bundle when it makes sense. Some carriers offer discounts when you insure multiple properties or combine policies.

• Review your policy every year, so your coverage keeps up with rebuilding costs and any updates you’ve made.

The Bottom Line

The cheapest landlord policy isn’t always the best deal. Your rental property is an investment, and the right coverage protects that investment and your income. Our goal is to help you understand your options so you can make the choice that’s right for you.

Have questions about insuring your rental property? Reach out to Fountain City Insurance Group. We’re happy to walk you through your coverage, no pressure, no sales pitch.

📍 10895 Lowell Ave, Suite 100, Overland Park, KS 66210✉️ sara@fcigkc.com