The most expensive insurance mistake a California housing provider (landlord) can make costs nothing up front: keeping the homeowners policy after the tenants move in, and finding out at claim time that it may not apply.
What is landlord insurance?
Landlord insurance, also called a rental dwelling policy, is property and liability coverage for a home you rent out instead of live in. A homeowners policy is written for an owner who lives there, and the Insurance Information Institute notes that it may not cover losses while the home is rented. Converting your former home into a rental? Calling your insurance agent before the tenants move in is step one, not a formality.
What a typical policy covers
Exact coverage depends on the policy and the carrier. According to the Insurance Information Institute, a landlord policy generally includes:
- Structure coverage: physical damage to the home from fire, lightning, wind, hail, ice, snow or other covered perils.
- Property you leave on site: items you provide for maintenance or tenant use, such as appliances.
- Liability protection: legal fees and medical expenses if a tenant or a guest is hurt on the property.
- Loss of rental income: most landlord policies cover rent you cannot collect while the home is repaired or rebuilt after a covered loss, generally for a specific period.
What it does not cover
- Your tenant's belongings. Your coverage is on the structure and your financial interest in it. That is what renters insurance is for, and it is one reason many landlords require it before a lease is signed.
- Loss-of-rent gaps. The coverage above applies after a covered loss. Ask your agent in writing whether a tenant who simply stops paying rent is covered, and how long the home can sit vacant between tenants.
- Extended vacancy. California's standard form fire policy, in Insurance Code section 2071, does not cover loss that occurs while a building is vacant or unoccupied beyond 60 consecutive days, unless the policy provides otherwise in writing. Read the vacancy clause in your own policy and ask about an endorsement if the home will be empty for a while.
- Anything the policy excludes. Ask your agent for the list of exclusions before you sign.
How much does landlord insurance cost in California?
The Insurance Information Institute puts landlord policies at about 25 percent above a standard homeowners premium, to pay for the increased protections. Quotes vary by carrier, so compare more than one. Insurance is also not the only disaster obligation: SB 610, in effect for 2026, added emergency and wildfire duties for housing providers. If you want that side of it, our SB 610 guide walks the duties start to finish.
Our read, from the operator's chair
The first question to ask on any home that used to be the owner's residence is which policy is on it right now. The carrier keeps billing and the owner keeps paying, so nothing flags the change until a claim. The fix costs nothing: tell the carrier the home is a rental, ask for the landlord form, and put the answer in writing. After that, compare quotes every few years.
Landlord insurance vs homeowners insurance
The short version of the comparison owners ask about most:
- Occupancy: homeowners assumes you live there; landlord insurance assumes a tenant does.
- Income protection: most landlord policies include loss of rental income after a covered loss.
- Contents: a landlord policy covers the structure and what you leave on site for the tenancy, not the tenant's belongings.
- Cost: the landlord policy generally runs about 25 percent more than a standard homeowners policy.
Extra protection on our top plan
Owners on our Complete Property Stewardship plan also receive Surevestor protections, subject to current program terms, which address risks traditional policies leave out, like eviction costs and malicious damage. Ask your insurance agent how much liability coverage fits your equity and how many properties you own.
Should you require renters insurance from your tenant?
Many landlords do. Renters insurance protects the tenant's belongings, which your policy does not cover, and it avoids disputes after a loss. If you add the requirement, put it in the lease and ask your leasing professional or attorney to confirm the current rules before you update it. One important fair housing note: assistance animals are not pets under California and federal law, so pet deposits, pet rent, added fees or pet-liability insurance cannot be applied to a tenant's service animal or emotional support animal.
Where insurance fits in your operating costs
Insurance is one line in the real cost of running a rental, alongside management, maintenance, and reserves. If you are budgeting the whole picture, our guide to what's included in a property management fee breaks down the other lines, and our security deposit guide covers the deposit rules that interact with damage claims.
Sources
- Insurance Information Institute: Coverage for renting out your home
- California Insurance Code section 2071
This is general information, not insurance, legal, or financial advice. Croskey Real Estate is not an insurance broker. Policies differ by carrier and property; confirm every coverage question with a licensed California insurance agent.
Frequently asked questions
How much does landlord insurance cost in California?
The Insurance Information Institute puts landlord policies at about 25 percent above a standard homeowners premium. Quotes vary by carrier, so compare more than one.
Do I need landlord insurance if I rent out my home?
Probably. The Insurance Information Institute says a homeowners policy may not cover losses while the home is rented, and that a longer-term lease generally calls for a landlord or rental dwelling policy. Call your insurance agent before the tenants move in.
What is the difference between landlord insurance and homeowners insurance?
Occupancy. Homeowners insurance assumes you live in the home; landlord insurance assumes a tenant does, and most landlord policies add loss-of-rent coverage after a covered loss. The landlord policy generally costs about 25 percent more.
Does landlord insurance cover loss of rent?
Most landlord policies cover lost rental income while the home is being repaired or rebuilt after a covered loss, generally for a specific period. Ask your agent in writing whether other situations, such as a tenant who stops paying, are covered.
Does landlord insurance cover my tenant's belongings?
No. Your coverage is on the structure and your financial interest in it. That is why many landlords require tenants to buy renters insurance before signing a lease.
Can a California housing provider require renters insurance?
Many landlords do. Put the requirement in the lease, and note that pet deposits, pet rent, fees or pet-liability insurance cannot be applied to assistance animals. Confirm current rules with your attorney.
