Best Landlord Insurance in Minnesota
- Best Landlord Insurance in Minnesota
The rights and responsibilities of landlords regarding housing codes, ordinances, and tenant dealings are laid out by the law in Minnesota. What isn’t always so clear is the insurance needs of a landlord.
Homeowners insurance won’t cover properties where the policyholder isn’t living. Thus, landlords in Minnesota need landlord insurance, also known as rental property insurance.
This detailed guide breaks down all the important information landlords in Minnesota need to know about insuring their rental properties.
How Much Is Landlord Insurance in Minnesota?
The average cost of landlord insurance in Minnesota is about $1,990 per year on a $200,000 home and about $2,140 per year on a $250,000 house.
The rates of landlord insurance, also known as rental property insurance, are reported to be about 15% to 25% higher than homeowners insurance premiums on the same houses. Using the numbers we calculated for our Minnesota homeowners insurance page, we were able to come up with average landlord insurance rates for the state, too.
Average Cost of Landlord Insurance in Minnesota
Cost of House
What Does Landlord Insurance in Minnesota Cover?
Landlord insurance policies come with specific areas of coverage. Some overlap with homeowners policies, but there’s a distinct difference. Since landlord insurance needs to cover people other than the policyholder (the tenants), the coverages you can get in your plan must reflect that.
Dwelling coverage financially protects the physical structure of your rental property. It covers the roof, walls, flooring, countertops, patios, pipes, wiring, and more.
Other structures coverage protects features on your rental property that aren’t attached to the main dwelling. These often include driveways, pools, fences, detached garages, sheds, and more.
Personal Belongings Coverage
Personal property coverage can come in handy if you keep maintenance items at your rental, such as lawn equipment or tools. It will cover these items from damage. Personal property coverage in landlord insurance won’t cover your tenants’ belongings.
Landlord Liability Coverage
Landlord liability coverage kicks in if a guest or tenant gets hurt at your rental property and pursues you for damages. If you’re found legally responsible, your liability coverage can cover medical bills and legal fees.
Loss of Income Coverage
Loss of income coverage can help cover your tenants’ rent payments if they’re forced to move out of your property after a covered loss. Instead of losing out on their rent while the insurance company fixes your home, your carrier can cover their rental payments with this loss of rental income coverage.
Types of Landlord Insurance in Minnesota
Just as there are many types of residential landlords, there are a few different types of landlord insurance policies to adapt to various situations. Common rental properties for residential landlords are:
- Single-family dwellings
- Multi-family dwellings (duplex, fourplex, etc.)
Landlord insurance can cover these dwellings in different ways.
DP-1 Insurance Policy in Minnesota
A Dwelling Fire 1 insurance policy (DP-1) is the most basic type of rental property policy you can get. It will cover your rental at actual cash value, meaning the insurer will deduct depreciation before reimbursing you for any property damage. This lowers payouts. DP-1s also cover the fewest potential forms of damage, called perils.
DP-2 Insurance Policy in Minnesota
DP-2 policies offer more protection than DP-1s. DP-1s cover nine named perils, the most notable being wind and fire damage. DP-2s typically cover up to 18 perils, including theft, vandalism, water damage, and fallen objects (like trees and tree branches).
DP-3 Insurance Policy in Minnesota
DP-3 insurance policies offer the most protection, making them the most expensive. In addition to the extensive perils they cover, they also cover losses at replacement cost. Not all properties will qualify for a DP-3.
How to Get the Best Minnesota Landlord Insurance
The best landlord insurance in Minnesota will vary by person. To get the best policy for you, understand your coverage needs and budget. Then, compare policies from several carriers.
Landlord insurance situations can vary greatly. For example, the best policy for an on-premises landlord in a new home in a rural area may want different types of coverage than an out-of-state landlord that owns two or three units in a small apartment building in a city.
You can cut out some coverages when you decide on a policy, saving you money. If you don’t have any personal belongings or other structures at your rental property, you can drop these coverages.
If you have several different tenants throughout the year or have many valuable financial assets, it would be wise to include liability coverage, which means getting a DP-2 or DP-3.
Out-of-state landlords may opt for more protection than a landlord who lives on-premises or very close to their rental since nearby landlords can more easily monitor their properties.
For any landlord, near or far, the budget is always top of mind. You may save money on premiums if you install certain safety features on your property, like security systems or fire sprinklers. You may also be able to bundle your policy, depending on your carrier.
What Companies Offer Cheap Landlord Insurance in Minnesota?
American Family and Travelers have some of the cheapest landlord insurance in Minnesota, based on our table below. Many factors affect the cost of landlord insurance, so the premium you experience from one of these providers may differ.
Nevertheless, an average helps to paint a picture of what you can expect when shopping for coverage. Take a look at the average premiums on a $250,000 home from some of the most popular landlord insurance companies in Minnesota.
Average Landlord Insurance Cost in Minnesota for a $250,000 House
Price Factors of Rental Property Insurance in Minnesota
Insurance companies have a thorough process of determining premiums, called underwriting. The underwriting techniques differ slightly at every carrier, which is why you won’t receive the same price from every company.
Some of the most significant factors providers look at when determining what you pay for the average landlord insurance in Minnesota include your dwelling’s age, size, construction style, and notable features.
When quoting, every insurance company will ask about the age of your property and the age of many components, such as the roof, plumbing, and electrical systems. This is because older homes tend to have more issues that can lead to claims. New construction is up to modern building and safety codes and is free from wear and tear. This is beneficial for landlord premiums.
Companies will also need to know the square footage of your rental property if they can’t determine it automatically by the address. Larger homes or dwellings simply need more coverage. For instance, a triplex or fourplex will likely need more coverage and thus have higher premiums than a simple apartment unit. The dwelling size influences replacement cost and the number of tenants.
Masonry dwellings may have lower premiums than frame dwellings. Masonry dwellings can better withstand high winds and are more resistant to fire damage, so insurers can give houses built from brick or concrete more favorable rates than wooden houses.
Several more factors, such as your claims history and location, also influence rates of landlord insurance for a rental property in Minnesota. Certain areas have more issues than others in the state regarding flood damage, tornado risk, or crime. Your insurer takes this into account.
Is Landlord Insurance Required in Minnesota?
Although landlord insurance on rental properties isn’t required by law, many people still need a policy because mortgage lenders require insurance coverage before giving home loans.
Most people buy homes with mortgages. Whenever you fund a home purchase with the help of a lender, that lender will require you to have insurance on the house. An insurance policy protects their (and your) financial investment in your property.
Since homeowners insurance won’t cover rental properties, you need landlord insurance. If you don’t maintain coverage for the life of your loan, your lender can force-place insurance on you. Force-placed insurance is not in your favor. It has higher premiums and less protection. You should always find and keep rental property insurance in Minnesota on your own.
No one will require you to maintain a policy if you have no mortgage, but that doesn’t mean you should drop coverage. It’s highly recommended you always keep protection to avoid paying for unexpected property damage out of pocket.
How to Get a Landlord Insurance Quote in Minnesota
To get the best coverage at the right price, you should get multiple Minnesota landlord insurance quotes when you’re in the market for coverage. Don’t settle for the first option you find. You may also want to get in touch with an independent agent.
We check all these boxes at Clovered. Our online quoting engine can help you find a policy from some of the best Minnesota landlord insurance companies in your area. As an independent insurance agency, you can also reach out and speak to one of our licensed agents during business hours. Reach them at 833-255-4117
You can also email us with questions anytime at firstname.lastname@example.org. We’d be happy to help you with your landlord insurance quote in Minnesota.
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.