Investing in rental property comes with financial risks, and insurance costs continue to climb. With premiums rising across the board, landlords must stay informed about coverage trends and expenses.
Below are some key statistics shaping the landscape of landlord insurance in 2025.
The cost of landlord insurance varies widely based on location, property value, and coverage choices. In 2025, annual premiums typically range from $2,100 to $4,000, though some landlords pay as little as $700 or as much as $8,300+, depending on risk factors and policy terms. Compared to homeowners insurance, rental property policies tend to be 15% to 25% more expensive due to added liabilities and coverage needs.
Over the past decade, prices have steadily climbed, with a 20% increase nationwide in the last year alone. States experiencing the sharpest rate hikes include Arkansas, California, Florida, Louisiana, and Texas. These regions frequently deal with extreme weather conditions and rising property values, both of which contribute to higher premiums.
Insurance costs differ significantly between owner-occupied homes and rental properties. While homeowners pay an average of $1,899 per year ($158 per month), landlords typically pay 25% more due to risks related to tenant occupancy.
| Policy Type | Average Annual Cost |
|---|---|
| Homeowners Insurance | $1,899 |
| Landlord Insurance | $2,100 – $4,000 |
The lack of consistent pricing data makes it difficult to pinpoint exact costs for every landlord, but the added risk of tenant-caused damage and liability claims plays a significant role in higher premiums.
Demand for landlord insurance continues to grow as rental property investments increase. In 2023, the market was valued at $20.7 billion, and projections estimate it will reach $40.9 billion by 2032. That reflects a 7.8% compound annual growth rate (CAGR) from 2024 to 2032.
Several factors contribute to this expansion:
✔️ More property owners converting homes into rentals
✔️ Rising construction costs, making insurance coverage more necessary
✔️ Increased weather-related risks impacting property claims
With these trends in place, the need for comprehensive landlord coverage continues to rise.
For those wondering about general insurance trends, homeowners insurance rates have climbed by 21% in 2025, adding an average of $244 per year to many policies. Rising labor and material costs play a role, but so do natural disasters and inflation. While policyholders may experience price hikes after filing a claim, broader economic shifts have affected rates across the board.
Landlord policies follow a similar pattern, as insurers adjust pricing based on rebuilding expenses and claim frequency. Rental property owners should be prepared for potential increases when renewing policies.
Insurance claims for rental properties often stem from property damage, weather-related incidents, and tenant-related liability issues. In a previous financial year, 53% of claims involved loss of rental income, highlighting a major financial concern for landlords.
Primary reasons for landlord claims in 2025:
🔹 Water Damage: Burst pipes, roof leaks, and plumbing failures
🔹 Storm Damage: Hurricanes, tornadoes, and severe windstorms
🔹 Accidental Damage: Unintentional tenant-related incidents
🔹 Liability Issues: Lawsuits stemming from tenant injuries on the property
Claim amounts vary widely, but in 2025, most landlords can expect payouts ranging from $10,000 to $27,000, depending on the type of damage.
While no official annual study tracks the exact amount landlords spend on tenant-related repairs, available data suggests damages are a frequent and costly concern. Even 13% of rental properties experience broken or damaged kitchen items each year, which translates to 5.59 million rental homes requiring fixes (Source: Dream Home Inspection).
Common types of tenant-related damages:
✔️ Appliance wear and tear – Dishwashers, ovens, and refrigerators often require repairs after tenant use.
✔️ Flooring and carpet damage – Heavy foot traffic, pet damage, and spills contribute to costly replacements.
✔️ Wall and paint issues – Holes, scuff marks, and DIY repairs gone wrong add to maintenance costs.
These expenses add up over time, making insurance coverage an important safety net for landlords. Policies with broader coverage can help offset repair costs, though some standard plans exclude tenant-caused damage.
Many rental property owners assume their policies provide full protection, but 70% of residential homes in the U.S. are underinsured, meaning the coverage amount would fall short in a total loss scenario. This issue becomes even more significant for landlords, as rental properties often include upgraded features or amenities that increase rebuilding costs.
Why underinsurance happens:
A policy review can help prevent financial losses in the event of severe property damage. Adjusting coverage to reflect current market values is one way landlords can avoid out-of-pocket expenses after a major claim.
✔️ Landlord insurance costs have increased, with premiums ranging from $2,100 to $4,000 per year, depending on location and coverage.
✔️ Rental property policies are 15% to 25% more expensive than homeowners insurance, mainly due to tenant-related risks and liability concerns.
✔️ The landlord insurance market is growing, projected to reach $40.9 billion by 2032 as more property owners invest in rental units.
✔️ Homeowners and landlord insurance rates have risen significantly in 2025, with increases averaging 21% nationwide.
✔️ Common claims include water damage, storm damage, and loss of rental income, with claim amounts typically ranging from $10,000 to $27,000.
✔️ Many rental properties are underinsured, with 70% of residential homes lacking enough coverage for full rebuilds.
Staying informed about insurance trends can help landlords make better financial decisions and protect their investments. With the right policy in place, property owners can safeguard against unexpected losses and rising expenses.
