Alabama Landlord Insurance


Alabama landlord insurance provides peace of mind for an investment property owner in AL. If you own one or more rental units in the state of Alabama you need to be sure you are properly protected. Here are five things that every landlord in AL needs on their insurance policy:

  1. Landlord Liability Insurance - maximum amount possible
  2. Contents coverage - protects landlords personal property
  3. Loss of rental income - assume 12 months of lost rents
  4. Dwelling coverage - get an updated reconstruction cost estimate
  5. Personal umbrella policy - increased liability protection if you own multiple units

Each tenant can pose a potential threat to your net worth if they are hurt on your property. This can be minimized by having the right protection in the form of landlord liability insurance. You should require each renter to carry renters insurance with at least $20,000 in personal property coverage and $100,000 in liability coverage.

Being a landlord has many advantages but it also comes with a lot of responsibility. Be sure to check with your insurance agent as to what insurance coverage you may need when renting out homes. Not all properties are the same and each will require an in depth review of your coverage. Don't be caught off guard when something bad happens, make sure you have a landlord insurance policy.

Cost of Landlord Insurance in Alabama

The cost to insure your rental property in AL is dependent upon numerous rating factors that home insurance companies use to determine the proper premium. When you own a condo or townhouse the cost of landlord insurance is very minimal because usually you split that cost with the homeowners association which insurers the exterior of your unit. If you insure a single family home or rental complex then your insurance costs are going to be much higher due to the replacement cost of the building is solely your responsibility.

Here are a few of the most common rating factors that insurance companies use to determine your landlord insurance premium:

  • Credit rating - This is your personal credit rating which is similar to a FICO score but can be based on other specific criteria such as payment history and bankruptcy.
  • Location - The zip code or city that your rental unit is located in has a dramatic effect on your insurance premiums as companies who have big losses in those areas will increase rates to get profitable.
  • Building type - This can include numerous things including condo, single family, and townhouse including the materials used to construct the property.
  • Claim history - If you have one or more claims in the past 3 years as a homeowner most insurance companies will surcharge your premium. Some companies may not even accept your business if you have more than two.
  • Discounts - If you have more business with an insurance carrier they are more likely to offer discounts to keep all of your business with them.

Landlord Insurance for Mobile Homes in AL

When renting out a mobile home in Alabama you need to consider the type of homeowners insurance that is necessary for proper protection. You will need a landlord insurance policy that covers your building property in addition to landlord liability. Landlord liability insurance will protect you against lawsuits filed by your tenants for property damage and/or injuries related to the upkeep of your rental property.

Many renters who live in Alabama wish to have their own space separate from other rental units and a mobile home is perfect for that scenario. Things to consider when renting a mobile home:

  • Require renters insurance from your tenants
  • Inform tenants that flooding is not covered on most insurance policies and if they wish to have personal property coverage they need to get flood insurance from F.E.M.A
  • Maximize landlord liability coverage on your policy, usually $1 million
  • Only have a small amount of personal property coverage unless you furnish the mobile home with your own belongings

Landlord insurance in AL doesn't have to be expensive; in fact you can usually pay close to what your homeowners insurance would be with the added benefits of coverage for a rental property. This means you will get all the great coverage such as personal property, building contents, and dwelling coverage plus the landlord specific liability insurance and loss of rents.

Get a rate quote for rental property insurance in Alabama today. It will likely save you hundreds of dollars over your current policy and possibly increase your coverage limits. Start now by entering your zip code at the top of this page.

What Determines Landlord Insurance Cost in AL

Each insurance company is different in the way they determine your rate and how much the average policy will cost but here are ways to ensure the lowest cost premium based on the factors above.

  • Good Credit - The better your credit the lower the cost of your insurance. Many states are now allowing credit as a rating criteria so get used to it being used. Try to keep your past payment history spotless and a FICO score above 720 is considered excellent.
  • Improve the Location - There is not much you can do about the location once you have purchased the rental property but be sure to keep the home well-kept and surrounding trees cut back to minimize potential hazards. The better your property appears the lower the cost to insure it will be.
  • Building type - Condo and townhouse owners will likely have a home owners association which will cover the exterior of the home so you are only responsible for the interior. This can save you hundreds of dollars each year. If the unit includes custom building and expensive materials expect to pay more because the cost to replace those items is greater.
  • No Claim history - Try not to make a claim if it is a small value of $2000 or less. Most companies look at multiple claims as a sign that you are prone to making claims in the future. If you are deciding whether to make a claim or not contact your insurance agent and ask them personally. Don't call the claim department and ask them because they are likely to document the call and file it for future use.
  • More Discounts - Ask about multiple policy discounts and the combination of auto and home insurance. Sometimes combining your personal auto insurance with this policy can save you 20-30% off each policy.

Alabama's 5 largest cities by population

City - Population

Birmingham - 212,237

Montgomery - 205,764

Mobile - 195,111

Huntsville - 180,105

Tuscaloosa - 90,468

*Data from 2010 Census Population by the Department of Economic and Community Development.

Common Landlord Insurance Claims in Alabama

(Most claims cost over $5,000 to repair wind damage)

(Most claims cost over $30,000 to repair damages from fire)

(Most claims cost over $5,000 to repair damage from hail)

(Most claims cost over $2,500 to repair physical damages to property)

Loss of Rental Income
(Most claims cost over $2,000 to recoup lost rental income)

NOTICE: The amounts listed above are for illustrative purposes only and should not be used to decide what coverage limits you need for your landlord policy. Speak with your insurance agent to determine the proper coverage limits.

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