How to Avoid Common Rental Property Insurance Mistakes
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 10
- 2 min read
Owning rental property can be a profitable venture, but only if it’s properly protected. Many landlords unknowingly make insurance mistakes that leave them vulnerable to financial loss, denied claims, or legal trouble. Whether you own a vacation cabin, duplex, condo, or Airbnb, understanding how to avoid these pitfalls is essential.
At Wexford Insurance, we specialize in rental property insurance for all types of dwellings—from short-term rentals to long-term leases. Here’s how to avoid the most common mistakes landlords make when insuring their properties.
Mistake #1: Using a Homeowners Policy for a Rental Property
One of the biggest errors landlords make is assuming their homeowner's insurance will cover rental activity. It won’t. Homeowners policies are designed for owner-occupied homes and typically exclude tenant-related risks.
Solution: Secure a landlord insurance policy or rental dwelling policy that includes coverage for tenant-caused damage, liability, and loss of rental income.
Mistake #2: Underinsuring the Property
Many landlords underestimate the replacement cost of their property. If disaster strikes and your coverage falls short, you’ll be left paying out of pocket for repairs or rebuilding.
Solution: Work with your insurance provider to ensure your policy reflects current construction costs and includes full replacement value.
Mistake #3: Skipping Loss of Rental Income Coverage
If your property becomes uninhabitable due to fire, flood, or other covered events, you could lose months of rental income. Without loss of rent coverage, you’ll still owe mortgage payments, taxes, and maintenance costs.
Solution: Add loss of rental income protection to your policy to stay financially secure during repairs.
Mistake #4: Overlooking Liability Coverage
If a tenant or guest is injured on your property, you could face a lawsuit. Many landlords don’t carry enough liability insurance, leaving their personal assets at risk.
Solution: Ensure your policy includes adequate liability limits and consider an umbrella policy for added protection.
Mistake #5: Failing to Update Your Policy After Renovations
Upgrades like new kitchens, HVAC systems, or added square footage increase your property’s value. If your policy isn’t updated, you may be underinsured.
Solution: Review and adjust your coverage after any major renovations or improvements.
Why Choose Wexford Insurance?
At Wexford Insurance, we help landlords avoid costly mistakes by offering:
Expert guidance on coverage gaps
Competitive quotes for short-term and long-term rentals
Support for multi-property portfolios
Final Thoughts
Rental property insurance isn’t just a formality—it’s a critical safeguard for your investment. Avoiding common mistakes like underinsurance, skipped coverage, and outdated policies can save you thousands and protect your long-term profitability.
Wexford Insurance is your trusted partner for comprehensive rental property coverage. Whether you own a single unit or a portfolio, we’ll help you stay protected and profitable. Connect today!
FAQs
Q1: Can I use my homeowner's insurance for a rental property?
No. You need a landlord or rental dwelling policy to cover tenant-related risks.
Q2: What is loss of rental income coverage?
It reimburses you for lost rent if your property becomes uninhabitable due to a covered event.
Q3: How often should I update my insurance policy?
Review your policy annually and after any major renovations or property changes.
