Tennessee Landlord Insurance


Tennessee landlord insurance is a cheap way to provide great protection against potential hazards of renting a home. As a rental property owner you know better than most that a successful rental unit must have minimal surprises from both the building and tenant. By surprises we mean the potential damages caused by weather, tenants or other outside forces that can reduce your income stream from that unit. Landlord insurance is a great way to protect your investment and minimize the damage done in the event of a covered peril.

What is a Peril?

Insurance companies use the word peril to describe an exposure to the risk of being damaged or injured. So a common peril that a landlord might incur is a wind storm or water pipe breaking. There are many perils that are listed on a home insurance policy so check yours to confirm what is not covered. Most policies are written in a fashion that states which perils are not covered and anything else is assumed to be covered.

Landlord Insurance Deductible

Most landlords ask if they should increase their deductible on the rental property insurance policy. The average policy will have a $1000 deductible for all perils but many agents and companies will change that deductible for various reasons. Some companies will not offer a lower deductible than $1000 or they may only offer percentage deductibles. The fact is the higher the deductible you have the lower the premium will be but you need to consider how much you can afford if a claim does happen.

Having a high deductible may be the right choice only if it lowers the annual premium enough to warrant such a high out of pocket cost. Be wary of having a 1% or 2% deductible since it is usually higher than most people can afford. For example a home with $200,000 in dwelling coverage would have a $2000 deductible for a 1% policy.

Cost of Landlord Insurance in Tennessee

The cost to insure your rental property in TN 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 TN

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.

Tennessee's 5 largest cities by population

City - Population

Memphis 646,889

Nashville 601,222

Knoxville 178,874

Chattanooga 167,674

Clarksville 132,929

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

Common Landlord Insurance Claims in Tennessee

(Most claims cost over $3,500 to repair wind damage)

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

(Most claims cost over $5,600 to repair damage from water)

(Most claims cost over $40,600 to recoup liability damages)

Accidental Discharge
(Most claims cost over $7,000 to repair damages)

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.

Compare Insurance Rates

Related Articles