Landlord insurance is similar to homeowners’ insurance, but typically includes additional liability coverage for the specific, added risks landlords face by renting out their property. It is not legally required in California but may be a requirement of any mortgage lender on the property. 

If you own rental property in California, you should have landlord insurance to protect your investment.  Typical landlord insurance policies cover property damage, like fires or storms. They also include liability protection for legal costs and judgments if a tenant or guest gets hurt on your premises.

Not all landlord insurance policies are created equal.  Landlords need to make sure they have the right coverage in place before a loss or potential legal liability arises.  Here is an overview of your options when purchasing landlord insurance coverage in California.

What Does Landlord Insurance Typically Cover in California?

Landlord insurance in California provides several different types of coverage, including dwelling coverage, personal property coverage and liability coverage for injuries sustained on your property.  It also typically covers liability for acts/omissions arising from the landlord-tenant relationship. Many policies also cover loss of rental income originating from a specific risk during the times your rental property is vacant. Your policy can cover the revenue losses for a set period of time.  Rates are based mainly on the amount you charge in rent and the creditworthiness of your renters. This is also known as rent guarantee insurance, or eviction insurance.

Be on the lookout for specific exclusions that state that the insurance company will not pay for attorney fees and costs on behalf of the landlord, which leaves the landlord to pay for these costs out of pocket.  Attorney fees and costs can be exorbitant for cases that culminate in a trial.  Look for a landlord policy that requires the insurance company to pay the fees incurred by the tenant.  You should also check to see whether the policy covers statutory damages, which are increasingly being awarded by contemporary courts. Almost all rent-control ordinances mandate the award of statutory damages, as do state law claims such as retaliatory acts statutes and habitability statute.  Civil Code §§ 1942.4& 1942.5. 

How Much Does Landlord Insurance Cost in California?

Landlord insurance costs in California will vary based on your property and unique risk factors.  On average, landlords in the U.S. spend about $1,500 a year on their landlord insurance policies. In general, landlord insurance will cost about 25% more than a standard homeowners insurance policy in your area. This is because rental properties are riskier than private dwellings, warranting an increase in policy premiums. 

Please contact Lynx Legal with any questions regarding the above, and for all your eviction needs.  We can be reached at 888-441-2355 or [email protected].  Our experienced professionals are standing by to answer any inquiries and/or complete the intake for your new matter.