Illinois Landlord Insurance


Illinois landlord insurance can make an ugly day look great if you have the right coverage. The weather in IL can cause massive headaches for landlords by causing broken water pipes, ice damns on roofs and slip and fall potential at the property. By having trusted insurance companies provide landlord insurance you are protected against the most common claims that a landlord will see while renting out his house.

Don't be confused between home insurance and landlord insurance policies as they are very different but offer similar coverage. The primary advantage to having a landlord specific policy is the coverage is tailored to meet the needs of rental property owners.

Coverage includes landlord liability, building coverage and contents insurance to name a few. In Illinois you will notice that water damage is one of the most common claims for home insurance. Water can cause massive damage and cause your tenants to have to find other living space until your unit is livable again. This can disrupt your rental income stream and having a landlord insurance policy can help by providing loss of rents coverage.

Loss of Rental Income

What do you do when a fire occurs in your building and all the tenants must move out until the damages are repaired? Usually this will allow your renter to move into another unit and void any rental term agreement you might have had. This can cause a major disruption in your rental income stream.

Chicago, IL has one of the highest populations per capita in the U.S.A and it continues to grow. With such a large population base it makes it important that you find good renters that will treat your property with care. If something happens like a fire and you lose those good tenants it can be hard to replace them. Loss of rental income insurance can provide that stream of income until the property is livable again.

Add up at least one year's worth of rental income and that should be the starting point for the amount of coverage you need on a landlord insurance policy.

Cost of Landlord Insurance in Illinois

The cost to insure your rental property in IL 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 be 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.

How to Find The Cheapest Landlord Insurance in IL

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.

Illinois' 5 largest cities by population

City - Population

Chicago 2,695,598

Aurora 197,899

Rockford 152,871

Joliet 147,433

Naperville 141,853

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

Common Landlord Insurance Claims in Illinois

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

(Most claims cost over $3,700 to repair damages from wind)

(Most claims cost over $37,000 to repair damage from fire)

Dog bite liability
(Most claims cost over $14,500 to recover from dog bite claim)

Loss of Rental Income
(Most claims cost over $1,800 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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