What Does Landlord Insurance Actually Cover? A Woe Guide for Property Owners and Airbnb Hosts
Imagine that you’ve just handed the keys to a new tenant. Maybe it’s a student renting your flat for the year. Or maybe it’s a traveller who found your place on Airbnb. Or someone who reminds you suspiciously of a Wednesday character. They arrive dressed head-to-toe in black, quoting Edgar Allan Poe, and you think: “Perfect! Quiet. No parties.” But three weeks later, you’re on the phone at midnight because the plumbing exploded like Thing trying to claw out of the pipes, or even worse: a visiting cousin trips on the front steps, threatening to sue. So who pays?
It doesn’t matter who your tenants are. If accidents happen, they’re expensive. Most landlords assume homeowners insurance (or Airbnb’s AirCover) will cover them. Often, it doesn’t. That’s why landlord insurance exists. But what does it actually cover? Coverlyn prepared this woe guide that strips out the legalese and puts the mysterious insurance gray areas in plain sight. Behold, a property owner!
What Is Landlord Insurance?
So let’s start with terminology and figure out what exactly is landlord insurance, and why isn’t your regular homeowners policy enough? In plain terms, it’s a specialized policy built for people who rent out property. Any property for rental: houses of all sizes, flats and condos, or even just one room or a dwelling garage listed on Airbnb. Landlord insurance protects you against the risks that come with strangers, not family, living under your roof.
And the last point could be the most relevant: homeowners insurance assumes you live in the property yourself. It covers you as the occupant. Even one short-term rental night could technically invalidate a homeowners policy if disclosed risks don’t match actual use. A candle left burning, a guest’s e-bike battery might turn a hallway into a torch, an overflowing bathtub, someone hitting a funny bone on your table’s corner and mistakenly thinking of a broken arm, all of these look very different to an insurer once rent is involved.
In fact, some banks won’t even approve your mortgage or refinance unless you carry landlord insurance if you have tenants. Here goes again – even a single Airbnb stay could void your homeowners coverage if your insurer decides your “use of property” wasn’t accurately disclosed. It could be very unfortunate losing a six-figure claim because of one booking.
Core Coverages: What Landlord Insurance Actually Covers
What do you envision when you hear “landlord insurance?” If a magic umbrella that covers everything from a broken stool to a ceiling covered in baby-poop colored stains of smoothie, wake up. In reality, the coverage is very precise. Think of it as three pillars: property protection, liability protection, and lost rent. There’s also a handful of optional extras that can make or break your safety net. Here’s what Coverlyn usually sees inside the policy, and where the fine print hides.
a) Property Damage
The central line of landlord insurance is protection for the physical structure of the property, including garage, shed, or, say, the fence around the garden. Covered risks include standard ones like fire, lightning, storms, vandalism, and more. Tenant damage can also be included, but insurers typically exclude “neglect.” If a tenant burns the curtains with a candle, you’re likely covered. If they never notice an insidious leak until black mold spreads across the corners and floorboards, you may be left holding the bill. That difference in wording could create frustrating disputes.
b) Liability Protection
Liability is the invisible shield landlords don’t usually value until they’re sued. If a tenant, their guest, or even a delivery driver is injured on your property, liability coverage pays medical costs and legal defense. Even if the injury seems minor, without coverage you could face a claim that spirals into tens of thousands of dollars. And “I didn’t know” won’t protect you in court; the legal expectation is that landlords keep their properties safe.
c) Loss of Rental Income
Disasters don’t just damage property, they could also disrupt rental property cash flow. If a fire or storm leaves your unit uninhabitable, loss of rental income coverage reimburses you for the rent you would have collected during repairs. What it doesn’t cover: a market downturn, voluntary renovations, or a tenant who simply decides to leave. It’s designed to keep your income steady after covered disasters, not during planned downtime.
d) Optional Add-ons
There are the extras, scenarios, often overlooked until it’s too late. Standard policies usually exclude floods and earthquakes, yet those are the exact perils most likely to cause catastrophic loss. Landlord contents coverage protects the appliances or furnishings you provide. Rent default insurance covers you if a tenant stops paying altogether. And if you rent short-term on Airbnb or VRBO, you’ll likely need a specific rider. Without these add-ons, even the best “full coverage” policy may leave critical gaps.
What Landlord Insurance Doesn’t Cover
For all its protections, landlord insurance isn’t a first responder that protects everything under your roof. Normal wear and tear is the brightest example. So keep in mind that aging appliances, an old roof, or a boiler that gives up after 20 years are considered maintenance and are your responsibility.
Landlord insurance doesn’t protect tenant belongings, be it laptop, clothing, or furniture. That’s why renters insurance exists. A single miscommunication here can turn into a courtroom fight, so it’s worth explicitly recommending it to every tenant.
If you run an undeclared side business from the property, for example, turning the garage into a workshop – your claim also could be denied. Understanding these exclusions is how you avoid the illusion of protection that leaves many landlords unprotected when it matters most.
Airbnb Insurance vs. Landlord Insurance
If you’re hosting on Airbnb or any other short-term rental platform, you might think you’re already covered. After all, Airbnb’s AirCover includes two types of built-in protection, one promises coverage for property damage, up to a certain limit, and another one offers liability coverage if a guest is injured. On paper, that sounds generous. In practice, let’s figure it out.
Even when the event seems covered, hosts often report lengthy disputes and delays before receiving any payout. And just to be clear: those protections only apply to bookings made through the platform. If you accept cash on the side, or a guest extends their stay informally, Airbnb’s shield turns into a pumpkin.
Landlord insurance, for instance, is a regulated contract. Meaning, it has a more predictable outcome and a clearer process when disaster strikes. For anyone treating short-term rentals as a serious investment, relying solely on platform coverage is arrogant. Landlord insurance could give you a more solid foundation.
Cost Factors & Misconceptions
Ask ten landlords what they think landlord insurance costs, and at least half will roll their eyes: “Too much.” But premiums are less arbitrary than they seem. Insurers weigh tangible factors like property type, location, number of units, and even the tenant profile. A single-family home rented to a long-term tenant with good credit is one thing. But what about a multi-unit building in a high-crime neighborhood with frequent turnover? Add or subtract security features like smoke detectors, alarms, reinforced doors, and the rate shifts again.
Most landlord insurance policies could cost 15–30% more than a standard homeowners policy because it reflects the entirely different risk profile: you’re insuring against tenant injuries, legal claims, and rental income loss, not just fire and theft.
How to Get the Right Landlord Insurance with Coverlyn
Coverlyn knows how frustrating it could be to choose landlord insurance, set coverage limits and decide on optional add-ons that vary widely between several factors. It’s usually not a rocket science but one policy might exclude flood damage, another may require additional riders for short-term rentals and could impose restrictions on tenant profiles. At least, comparing it all together is a long and boring process.
Coverlyn simplifies the process. With a transparent, fast, and tailored approach, it matches hosts and STR investors with policies designed specifically for their property type, location, and tenant profile. Instead of guessing which policy covers what, you get an “explain me like I’m five” comparison that highlights key differences, limits, and exclusions. Coverlyn helps you to avoid underinsurance or unnecessary overpayment.
Do you own a single-family home? Are you invested in a cozy flat in a multi-unit building for long-term rentals? Planning to list your apartment via Airbnb? Coverlyn ensures you find coverage that fits your real-world risks.
Try Coverlyn today, and buy the landlord insurance that works for you.