Landlord showing a happy couple a home rental.

Landlord Insurance Basics

Updated May 3, 2024 . AmFam Team

As a landlord, you know that the job has a ton of potential benefits. You can collect rent while watching your property’s value grow and grow, all while creating substantial wealth for you and your family. Of course, having rental property comes with its challenges too — like concerns about potential damage and liability. What’s a landlord to do?

When it comes to setting up your business, it’s important to keep protection in mind. For example, incorporating or forming a limited liability company can help protect you from personal injury claims. Being strategic about your business from the outset will help protect it in the long run.

Home with a flooded living room.

Business Owners Policy

Regardless of how you set up your business, you’re going to need insurance and the main policy to obtain for protection is a Business Owners Policy, or BOP for short. American Family offers different types of insurance coverages, including BOP, to meet the specific needs of rental property owners. An American Family agent can help you determine the right product for your unique business.

A BOP protects you from damages to your property. While your tenants may insure against loss of their personal possessions with renters insurance, you need protection for loss to the building and its fixtures, inside and out. With a BOP policy, you also get coverage for liability claims against you or the building. A slip and fall injury on the property could result in a lawsuit, and a BOP means you’d be protected up to the limits of your policy.

Most importantly, and something that can easily be overlooked, is the fact that a BOP gives you a built in legal team to defend you in case of a coverage claim.

Person resting her broken leg.

Commercial Liability Umbrella Policy

Need even more protection than your BOP can offer? Consider a commercial liability umbrella policy. This coverage picks up where your BOP leaves off. It’s an added layer of protection in case of major accidents or incidents. Please note, this umbrella policy is not a standalone policy; you’ll need to have a BOP in place first.

Happy driver sitting behind the wheel of her vehicle.

Business Auto Insurance

Another type of insurance you may need is a business auto policy. If your rental business owns your car, truck, or van, you need special vehicle insurance. This coverage not only covers damage to your vehicle, but also any medical costs and liability resulting from accidents with the vehicle. Like the BOP, a business auto policy can be supplemented with an umbrella policy to increase the limits of your coverage.

Happy couple sitting on a couch with a laptop.

Life Insurance

As mentioned above, your property value may grow and provide you with substantial wealth. What happens with your property should the unexpected happen? Federal estate tax and state death taxes can erode your estate. But you can protect your family by carrying life insurance to cover projected taxes and estate administration costs.

The best way to determine your insurance needs is to discuss your personal and rental situation with a knowledgeable local American Family agent, who would be happy to answer all your questions.

This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.

The information on this webpage represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Coverage features and limits vary by state and may be subject to change. Some products are not available in every state. Discount availability and eligibility vary by state and policy terms. (Discounts apply to auto and property policies.) Please check with your agent and read the policy for exact details on coverages and exclusions.

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