Best Landlord Insurance in Michigan
- Best Landlord Insurance in Michigan
Landlord insurance in Michigan is essential to protect yourself from the elements and much more. Getting the right policy is a quality safety net that can save you tens of thousands out of pocket.
Since homeowners insurance won’t cover houses you don’t live in or places with paying tenants, you need a dedicated landlord insurance policy. To find the right coverage at the best price, use this detailed guide we created that goes over all the fine print of rental home insurance in Michigan.
How Much Is Michigan Landlord Insurance?
Landlord insurance in Michigan costs about $1,758 yearly on a $200,000 home, $2,510 on a $300,000 house, and $3,071 on a $400,000 home.
Compared to nearby states, Michigan’s landlord rates are around the middle ground. They are slightly higher than Iowa’s average premiums, lower than Illinois’, and on par with Indiana’s rates.
A commonly touted statistic is that landlord insurance premiums are about 15% to 25% higher than homeowners insurance premiums on the same property. Using this information and the average rates we put together on our Michigan homeowners insurance page, we determined the cost of the average landlord insurance in Michigan at different home values in the state.
Average Cost of Landlord Insurance in Michigan
Cost of House
Rates will vary based on many factors, so you may experience different premiums depending on your location, claims history, property features, and more. We break down the most significant cost factors in detail later on.
Generally, though, the more your property is worth, the more coverage you need. And, the more coverage you need, the more you’ll pay for rental home insurance in Michigan, which is why you can see premiums climb by home cost in the table above.
What Does Landlord Insurance in Michigan Cover?
Landlord insurance policies cover landlords from several sources of damage in several ways. In addition to covering your physical property, landlord insurance policies can protect your personal financial liability.
Every rental property insurance policy will have dwelling coverage, which is designed to cover the structure of your building and its permanently attached components. It covers your roof, walls, flooring, patios, pipes, and more.
Other structures coverage safeguards fixtures and features on your property not attached to the main house. These can include detached garages, sheds, fences, carports, and more. You won’t need this coverage if your rental property doesn’t have any other structures on it.
Personal Belongings Coverage
Personal property coverage in a landlord policy covers any items you own that you may keep at your rental property for maintenance, such as lawn equipment, snowblowers, or tools. You also may not need this coverage if you don’t hold anything at your rental property.
Landlord Liability Coverage
Landlord liability coverage applies if you’ve been found legally responsible for a tenant or guest injury at your rental. Your liability coverage can cover legal fees and the injured party’s medical bills.
Loss of Income Coverage
A landlord policy’s loss of rental income coverage kicks in if your tenants have forcibly moved out due to damage from a covered peril. This coverage enables your insurer to reimburse you for lost rent payments you’d be missing out on while the home gets repaired for tenants to move in again.
Types of Rental Home Insurance in Michigan
You won’t receive all of these coverages in your landlord policy if you don’t want them. You can eliminate some to save money, and some coverages may not be available with certain policies. There are three types of plans for rental home insurance in Michigan.
DP-1 Insurance Policy in Michigan
DP-1 insurance policies are the most basic landlord coverage you can get. They cover the fewest potential sources of damage, called perils. DP-1s cover nine perils, the most common being fire and wind damage. DP-1 plans cover your property at actual cash value, meaning your insurer will discount depreciation for all payouts before reimbursing you.
DP-2 Insurance Policy in Michigan
DP-2 policies cover more perils than DP-1s, notably theft, vandalism, and water damage from freezing pipes or snow. DP-2 policies also cover losses at replacement cost. However, they might not include liability by default.
DP-3 Insurance Policy in Michigan
DP-3 insurance policies in Michigan operate on an open-perils basis, meaning they cover all forms of damage unless noted as excluded by the policy. This means they offer the most comprehensive damage protection out of the three.
DP-3 policies typically include liability coverage by default, too, and you can easily add other coverages and endorsements if they’re not included.
How to Choose the Best Michigan Landlord Insurance
To get the best Michigan landlord insurance, you must understand your coverage needs, budget, and which landlord insurance policy is right for you. After knowing how to protect your property, you should compare quotes from several providers.
Every landlord should have insurance on their rental property. Otherwise, you risk paying for property damage or accidents out of pocket, which can easily run up thousands or tens of thousands in bills.
The best landlord insurance in Michigan will vary from person to person depending on their coverage needs and budget. For instance, although liability coverage is very helpful, it might not be necessary for your plan if you have no tenants currently. A DP-2 may sufficiently serve vacant or unoccupied homes with no liability insurance.
Or, if you live right next to your empty rental and can ensure its care, you may be more comfortable getting a DP-1, even though it excludes theft and vandalism coverage.
If you have no other structures or personal property on your rental, ask about taking these coverages out of your policies to save money. Adjust your dwelling coverage as needed to reflect your property’s replacement cost at all times, which means revisiting your policy if you make renovations.
Perhaps most importantly, don’t settle for the first policy you see. You must shop around to know you’re getting a good deal with a good company.
Companies With Cheap Landlord Insurance in Michigan
Based on our analysis, AAA and Frankenmuth have some of the cheapest landlord insurance in Michigan. Although known for its car insurance, AAA offers various home insurance and home and auto bundles. Frankenmuth is a large regional insurance carrier serving much of the South and Midwest.
These providers are far from the only options, though. Look below at the table of some popular landlord insurance companies in Michigan and their average rates.
Average Landlord Insurance Cost in Michigan for a $300,000 House
Note that these average premiums don’t necessarily reflect a quote you may receive from a company. One of the providers listed above may be cheaper or more expensive in your area, depending on your property and more. If you hear good things about a particular company, don’t hesitate to get a quote from them.
Cost Factors of Renal Home Insurance in Michigan
The cost of rental property insurance in Michigan depends on many factors inside and outside the policyholders’ control. Features of your property, your area, and your carrier will affect rates.
Property value is crucial, as we mentioned earlier. Larger places with more other structures and expensive fixtures need more coverage. The type of dwelling also influences premiums. When getting landlord insurance, your provider will ask if your property is:
- Single family
- Multi-family (duplex, fourplex, etc.)
Larger, multi-family dwellings will likely have higher premiums than smaller, single-family houses or lone condo units.
The location of your property is also important. Properties in flood zones or high-crime areas may be riskier and thus pay higher premiums. Carriers look at property claims in your area to see if your house is prone to a certain type of damage. Additionally, homes within 1,000 feet of a fire hydrant or fire station can receive a discount.
The business practices of your provider can also impact your rates. If your carrier paid out a lot of premiums in the past year or lost many policyholders, they may raise rates on rental property insurance in Michigan to recoup some money.
Is Rental Property Insurance Required in Michigan?
Residential landlords are required to have a form of landlord insurance if they have mortgages on their rentals. Lenders mandate insurance coverage as part of their loans to protect their investments.
No law in Michigan requires landlords to have insurance. But, mortgage companies typically have stipulations as part of their loan deals that loanees need insurance coverage on their properties for the life of the loan. If the property gets destroyed, the lender can recoup the value of their investment in your property from the insurance company.
Since homeowners insurance doesn’t cover properties with tenants, residential landlords need landlord insurance. Prime examples are landlords who live on one side of a duplex or one unit of a small building they own while renting out the other parts.
Landlords who rent out second or vacation homes for parts of the year will also need rental home insurance in Michigan on their rental properties.
Ownership of any rental property through trusts, corporations, or other business entities requires commercial insurance, which is a different type of coverage.
How to Get a Landlord Insurance Quote in Michigan
When in the market for landlord insurance, you should compare policies from multiple providers. At Clovered, we make this easy. Use our online quoting platform to get a landlord insurance quote in Michigan and find the best deal.
You've worked hard to buy your rental property. Protect it with a custom policy at an affordable price.
The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.