Quick Answer: Homeowners insurance protects the home you live in. Landlord insurance protects the property your tenants live in. Using the wrong policy can mean denied claims, out-of-pocket repairs, and months of unrecovered rental income.
If you are renting out a property in Pennsylvania or converting your primary residence into a rental, this guide breaks down the key differences between landlord insurance and homeowners insurance, including coverage, cost, and when you need to switch.
What Is Homeowners Insurance?
Homeowners insurance is designed for one situation: you own the home, and you live in it as your primary residence.
A standard homeowners insurance policy typically covers:
The structure of your home against perils like fire, wind, hail, and lightning
Your personal belongings inside the home, including furniture, electronics, and clothing
Personal liability if a guest is injured on your property
Loss of use and additional living expenses if a covered event forces you out temporarily
The entire policy is built around one central assumption: you are present in and responsible for the home. The moment a paying tenant moves in, and you move out, that assumption no longer holds. If your premiums have been climbing, our guide on why homeowners' insurance is going up in Pennsylvania explains what is driving costs in 2026.
What Is Landlord Insurance?
A landlord insurance policy, sometimes called rental property insurance or a dwelling policy (DP policy), is specifically built for properties you own but rent out to others.
A standard landlord insurance policy typically covers:
Dwelling and structural coverage for the building against covered perils
Landlord-owned personal property on the premises, such as appliances, lawn equipment, or furnishings provided to the tenant
Liability protection for injuries or property damage suffered by tenants or their guests
Loss of rental income, also called fair rental income coverage, if a covered event makes the property temporarily uninhabitable
Tenant damage coverage for losses caused by irresponsible tenants, depending on the policy type
One important note on landlord insurance tenant damage: your tenant's personal belongings are never covered under your landlord policy. That is what renters insurance is for, which is why most experienced landlords require tenants to carry it as a lease condition.
Landlord Insurance vs. Homeowners Insurance: Side-by-Side Comparison
The table below shows the key landlord insurance coverage differences compared to a standard homeowners policy:
Coverage Feature | Homeowners Insurance | Landlord Insurance |
|---|---|---|
Owner occupies the property | Required | Not applicable |
Rented to tenants full-time | Not covered | Covered |
Building/dwelling structure | Yes | Yes |
Owner's personal belongings | Yes | Not by default |
Landlord-owned appliances/furnishings | Limited | Yes (with the right policy) |
Tenant's personal belongings | No | No (tenant needs renters insurance) |
Personal liability | Broad (on and off property) | Property-specific |
Loss of use/living expenses for owner | Yes | No |
Lost rental income | No | Yes |
Tenant damage | Not covered | Covered (varies by policy tier) |
Occupancy: The Single Biggest Difference
The core distinction between landlord vs. homeowners insurance comes down to one question: who lives in the property?
Homeowners insurance requires the policyholder to occupy the home. Landlord insurance is for owners who live elsewhere while tenants occupy the property. If you rent out a single room while still living in the home, some homeowner's policies may extend coverage with an endorsement, but this depends entirely on your insurer and the arrangement.
Liability and Loss of Income Coverage
Both policy types include liability protection, but the scope differs. Your homeowners policy covers you broadly, including incidents away from your home. Landlord liability coverage applies specifically to the rental property. If a tenant slips on an icy walkway you failed to clear or a guest is hurt due to a structural hazard, your landlord policy responds. Note that perils like water backup and sewer damage are often excluded from standard policies of either type. Our guide on water backup insurance in Delaware County, PA, explains why this add-on matters for landlords with basement units.
On the income side, if a covered fire makes your home unlivable, your homeowners' policy covers your hotel and living expenses. If the same fire damages your rental and forces your tenant out, your landlord policy reimburses the rental income you lose during repairs. It does not cover the tenant's hotel stay — that falls under their own renters' insurance.
Landlord Insurance Cost vs. Homeowners Insurance Cost
Landlord insurance typically costs about 15 to 25 percent more than a comparable homeowners policy. According to the Insurance Information Institute, this premium difference exists because rental properties carry higher risk from tenant-related claims, liability incidents, and more frequent property damage.
Coverage Type | Estimated Annual Cost |
|---|---|
National average homeowners insurance | Around $2,110/year (NerdWallet, 2026) |
Landlord insurance (national estimate) | Approximately $2,600 to $2,700/year |
Pennsylvania homeowners insurance average | Around $1,284/year |
Pennsylvania landlord insurance average | Approximately $1,080 to $1,180/year |
In Pennsylvania, landlord insurance for rental property can actually come in below the homeowner's average in some regions, due to lower property values and claim histories. Working with a multi-carrier independent agency like Dunn and Danese means we can shop across carriers through our service center to find the best rate for your specific property.
Key factors that affect your landlord insurance premium:
Property location: urban areas and flood zones carry higher premiums
Property age and condition: Older buildings typically cost more to insure
Policy tier: DP-1 offers basic named-peril coverage; DP-3 offers open-peril coverage with replacement cost value payouts
Deductible: A higher deductible lowers your annual premium
Safety features: smoke detectors, burglar alarms, and sprinkler systems can reduce costs
Bundling: combining your landlord policy with home or auto coverage can produce meaningful savings
The 3 Types of Landlord Insurance Policies
Landlord insurance is issued as a Dwelling Policy (DP) in three tiers:
DP-1 (Basic Form): Covers only named perils like fire, lightning, windstorm, and hail. Pays claims at actual cash value after depreciation. Most affordable but least protective.
DP-2 (Broad Form): Covers a broader list of named perils, including burglary, collapse, and ice damage. Pays claims at replacement cost value, meaning current repair or replacement costs.
DP-3 (Special Form): Covers all perils except those explicitly excluded. Pays replacement cost value and typically includes loss of rental income, liability, and optional landlord-owned property coverage. This is the most recommended option for Pennsylvania landlords with long-term tenants, and offers the strongest protection in landlord insurance tenant damage scenarios.
When Should You Switch to Landlord Insurance?
You need landlord insurance immediately if:
You are moving out of your home and renting it to a long-term tenant
You have purchased a separate investment or rental property
You are regularly renting on platforms like Airbnb or Vrbo
You own a vacation property rented out for income
You may be able to add a homeowner's endorsement if:
You are renting out a single room while still living in the home
You are doing a one-time short-term rental for a specific event
Your insurer offers and approves a short-term rental rider
The "accidental landlord" scenario is where coverage gaps cause the most harm. Many homeowners start listing on Airbnb casually and gradually become regular hosts without realizing that their homeowners' policy no longer applies. Before listing your property anywhere, review the most common home insurance mistakes Pennsylvania homeowners make.
The clearest rule: if someone is paying to stay in your property, call your insurance agent first.
If you are unsure which coverage fits your situation, the agents at Dunn and Danese can review your current policy and compare options across carriers. For more on why an independent local agency makes a difference, see our post on why a local Pennsylvania insurance agency is your best choice.
Frequently Asked Questions
1. What is the difference between landlord insurance and homeowners insurance?
Homeowners insurance covers owner-occupied properties and includes personal belongings and living expense coverage. Landlord insurance covers rental properties, protecting the structure, landlord-owned items, liability tied to the rental, and lost rental income. The key distinction is occupancy.
2. Is landlord insurance more expensive than homeowners' insurance?
Yes. Landlord insurance typically costs 15 to 25 percent more than a comparable homeowners policy because rental properties carry a higher risk of tenant-related claims, liability exposure, and property damage.
3. Does landlord insurance cover tenant damage?
Many landlord policies cover tenant damage, with DP-3 offering the broadest protection. Standard wear and tear is always excluded. Tenant belongings are never covered under landlord insurance.
4. Can I keep my homeowners' insurance if I rent out my property?
Generally, no. Ongoing rentals require a dedicated landlord insurance policy. A short-term rental endorsement may work for occasional rentals, but long-term tenants require a full landlord policy.
5. Do tenants need their own insurance?
Yes. Neither policy covers a tenant's personal belongings. Tenants should carry renters' insurance for their possessions and personal liability. Many Pennsylvania landlords make it a lease requirement.
Get the Right Coverage for Your Property in Pennsylvania
Whether you are converting your home into a rental or growing a portfolio of investment properties, the right insurance needs to be in place before your first tenant signs a lease.
At Dunn and Danese, our independent agents work with multiple carriers to find the landlord insurance policy that fits your property, your tenants, and your budget. We serve homeowners and landlords across Drexel Hill, Exton, and all of Pennsylvania.
Visit our landlord protection page to learn more, or contact our team to speak with a licensed agent today. You can also explore our insurance blog for more guidance on protecting your home and investment properties in Pennsylvania.