Insurance is one of those things that you never want to use, but you’re always happy to have it when you need it. And when you own rental properties, ensuring you’re as protected as possible in the event of a sudden change in circumstances feels like a must-have. However, while it may seem necessary to carry landlord insurance, New York doesn’t require property owners to have it.
In this guide, we’ll review New York landlord insurance so you can decide if it’s right for you and your properties.
From the overflowing streets of New York City to the sprawling rural towns of upstate New York, landlord insurance protects landlords from financial loss due to structural damage to the rental property, loss of rental income from a covered event, legal fees incurred from injuries on a landlord’s property, and additional policy-centric occurrences.
Because homeowners insurance only covers an owner’s primary residence, landlords should consider landlord insurance. On the other hand, rental insurance covers a renter’s possessions. So, while New York doesn’t require landlords to have landlord insurance in New York, those who want to protect their investment should think about adding landlord insurance.
Consider this: In a dense, crowded city, the risk of fire or water damage from nearby units dramatically increases, which could make a considerable impact on your bottom line. Further, natural disasters, vandalism, and theft can happen anywhere, so protecting against these unforeseen circumstances is critical.
Landlord insurance comes in three different forms, each with a different price structure and varying levels of protection.
The lowest level of landlord insurance New York companies offer is DP-1. It’s the most inexpensive compared to the other tiers, but it still protects landlords from common property damage. DP-1 is a “named peril policy,” meaning it will only cover the actual cash value damage to the rental property that is caused by one of the nine perils listed:
DP-1 policies only cover damage from the above list, so things like water damage from internal pipes or vandalism are not covered, for example. A DP-1 policy will pay out claims based on actual cash value, meaning insurance companies will factor depreciation into the claim and only pay out the current value.
The next tier of landlord insurance coverage is DP-2. It’s also considered a “named peril policy,” but while DP-1 covers nine perils, DP-2 adds nine more. Like DP-1, DP-2 doesn’t include liability coverage, but it can usually be added to your policy for an additional fee.
The additional perils included in DP-2 are:
Specific perils listed above, including cracking/bulging, electrical, and water damage, are only covered when they occur due to an accident.
Starting at the DP-2 level of coverage, fair rental value is also included in the policy. If one or more of the 18 perils listed above cause the landlord to lose rental income because the property becomes uninhabitable, the policy will pay that rent loss out to the landlord.
Additionally, DP-2 coverage insures the property for its replacement cost, otherwise known as Functional Replacement Costs. In short, landlords will receive a total payout for the cost of the repairs or replacement instead of the depreciated value.
The most expensive and comprehensive tier of coverage is DP-3. An “open peril” policy means that insurance companies will cover losses from almost any peril, with some exceptions that could vary depending on the insurer and the rental property’s location. For instance, some notable exclusions of a DP-3 policy are:
DP-3 policies typically include fair rental value coverage and personal liability coverage, which helps to protect the landlord legally from accidents that cause damage to the property or bodily injury to those on the property. This could include the cost of medical bills or legal defense dues, depending on the specifics of the policy.
If you’re deciding on landlord insurance, New York has a number of private insurers ready to talk to you. But how do you choose the right one for you and your properties?
First, assess your coverage needs. Depending on the number and type of properties you wish to ensure, different levels of coverage could work best. And the location of these properties matters, too. Are your properties close to water or in an area that could face a high risk of vandalism?
Next, determine the different policy types and tiers of coverage. For some landlords, the bare minimum coverage for peace of mind is all that’s needed. But for others, more robust policies can ensure the lowest risk of financial loss.
Finally, since there are so many options, shop around to find the best rates that provide the best coverage. In the next section, we’ll review some of the top service providers in New York.
To cut through all of the noise out there, here are some of the best companies for landlord insurance New York has to offer:
Steadily is a highly-rated, full-service landlord insurance company with incredible customer service, quick attention to claims, and comprehensive coverage.
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A household name for insurance, Farmers has been around for years and has an established base of agents nationwide.
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Explicitly tailored towards landlord insurance, Obie is a newer company with competitive pricing nationwide.
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Another national brand that offers coverage everywhere and features competitive rates as an established company.
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State Farm has been around for a long time and has extensive experience in all insurance types, including landlord insurance.
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The cost of landlord insurance in New York can vary widely depending on the location and type of coverage you’re looking for.
As recently as May 2024, the average cost of landlord insurance is around $1600 per year. However, that’s highly dependent on the specific community in which the rental property is located and the coverage type. Talk with a few providers before making a decision.
While TurboTenant doesn’t directly offer landlord insurance, New York residents (and landlords across the United States) can consider Steadily, one of our trusted partners, for customizable plans and competitive rates.
Once you’ve found the coverage you need, consider managing your properties yourself with TurboTenant’s DIY landlord software. It’s much cheaper than a property management company, and it covers critical aspects of the property management process, including:
With these tools in your arsenal, you can begin automating your rental property management, saving you time and money.
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