3 Best Landlord Insurance Policies

  • Author: Devin Henry
  • Last Updated: March 6, 2022
Table of Contents

You’ve already picked out the best property and moved in the best tenants, so why do you need to worry about purchasing the best landlord insurance? Serving as a landlord can be incredibly rewarding in terms of gaining a high return on your investment, and you get the satisfaction of knowing you are providing quality housing services to your tenants. Landlords can face costly out-of-pocket repairs or lawsuits, however, making getting proper protections a must-do. 

Fortunately, plenty of insurance policies exist to protect your property — and your pockets. As you navigate the dos and don’ts of being a landlord, Nomadic Real Estate is here to help you discern the best plan for your role. Here’s everything you need to know about protecting yourself and your property rental business. 

What is Landlord Insurance? 

Landlord insurance is a specialized policy available for anyone who rents out properties they own. Like all types of insurance, these policies exist to protect owners from potential damage or claims against their buildings. Although robust policies can be quite an investment, the initial payment quickly pays off if landlords are faced with extensive building repairs, lawsuits, or destruction of their rental properties. 

These policies typically seek to protect holders in terms of both property and liability. Here’s what you need to know about both aspects:

Property Protection

This facet of your insurance policy primarily serves to protect the physical buildings you’re renting out. This can include housing, surrounding parking structures, and landscaping features like fences or gates. Maintenance equipment used on your property can also fall under this umbrella of policy, although some protections are subject to additional fees or premiums. 

Liability Coverage

This portion of your plan protects you from costs associated with unforeseen accidents on your property. Liability insurance has you covered if you are found responsible for the medical costs of one of your tenants, for example, and can be used to absorb the cost of burglaries, vandalism, or arson. Natural disasters are another costly liability landlords face and can be protected under a policy, frequently with additional costs. 

It’s important to remember that landlord insurance can be fairly inclusive, but it will not cover every maintenance need on your property. In-unit appliances that need repairs will have to rely on their own insurance packages or warranties. 

How to Know if You Need Landlord Insurance

Many landlords who only rent out a single property prefer homeowner’s insurance over landlord policies. Here are a few facts to keep in mind:

  • This can be helpful as it provides protection for personal property within the building, while landlord insurance does not. 
  • You may struggle to qualify for these policies if you do not typically live at the residence, however. 
  • Those who plan to rent their properties in the long term may find that landlord insurance is likely the way to go. 
  • Requiring renter’s insurance from your tenants is a great way to still have the protection of the personal property within the building. 
  • The higher premiums associated with landlord policies are frequently a turn-off for prospective purchasers. 
  • As a business-savvy landlord, it is reasonable that you would be wary of rip-offs. 

Insurance prices are calculated based on the perceived risk that the insurance company is taking by protecting your business. A building with many tenants will face more damage and opportunities for claims, for example, because your renters may not treat your property with the same care with which they would treat their own. 

Despite being a larger initial investment, you may see your purchase of landlord insurance paying off quicker than other policies. Selecting the right plan is not a decision to take lightly, though. Here are some of the best landlord insurance policies available, as well as some tips for matching your property with the perfect protection. 

Landlord and tenants discussing insurance

3 Best Landlord Insurance Policies

You’ll never run out of options when searching for a landlord insurance policy. This gives you a lot of freedom in your choices, but it can also make the process more tedious and confusing. It’s worth noting that if you have an existing insurance policy with one of these firms, you may be able to get a more affordable quote or package. Here are some good places to start. 

State Farm

State Farm‘s comprehensive landlord protection is a great starting package that includes the standard property and liability protections as well as some bonus features that may typically cost you extra. If, for example, your tenants have to evacuate the property for any reason, State Farm will cover the expense of their travel. This means you can still go above-and-beyond for your renters, without hurting your own bottom line. This policy also offers upgrades that will keep you protected in the increasingly digital age, and can help you heal from security lapses like data breaches or identity theft. 

Farmers

Owners of multi-unit properties should check out Farmers Landlord Insurance. It does not provide coverage for unconnected property structures such as sheds or garages, but the company has many features to increase the ease and efficiency of your workday. Its SmartMove software helps you to select strong tenants who are unlikely to incur many damages. 

American Family Insurance

American Family Insurance provides protection through its Business Owners Policy, which includes a legal team to act as your defense for coverage claims. Larger operations and more robust coverage may want to consider its Commercial Liability Umbrella Policy. This upgraded package provides extra protection against major accidents, which all-too-often come with major price tags. 

Remember, this is only scratching the surface of policies available to protect your enterprise. Fortunately, if you need any more guidance, we’re always here for you. At Nomadic Real Estate, we know that having peace of mind can be just as valuable as a piece of property. We exist to aid individuals and organizations with leasing, management, and sales with five dedicated teams and over a decade of experience. Contact an expert at Nomadic Real Estate today to get answers to any more landlord insurance policy questions you may have.

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Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.