A Guide to New York Landlord Insurance

From the bustling streets and skyscrapers of the five boroughs to the picturesque mountains, lakes, and college towns upstate, New York has one of the largest rental markets in the United States. 

While this is good news for landlords in New York, maintaining an investment property in this state also comes with challenges — including rising property costs, high taxes, and strict laws surrounding habitability and maintenance. The bottom line? New York landlords need to protect themselves and their investments with proper insurance. 

Here, we explore which factors affect the price of New York landlord insurance, how to protect your rental portfolio, and strategies for lowering your premiums. 

A brief overview of New York’s real estate market 

New York is a highly populated state with roughly 19.4 million people. This has a ripple effect across the real estate market, limiting rental availability and raising rental prices. In New York City, most residents can’t afford to purchase a home and instead choose to rent. 

The same is true farther upstate, outside of the metropolitan area. College towns like Ithaca, Albany, and Syracuse have large populations with many students looking for rental properties. Aside from being hubs for college students, many of these towns are also on the edge of scenic mountains perfect for skiing, hiking, and weekend getaways, creating opportunities for short-term vacation rentals.

Property types and insurance considerations

All this is to say: rental properties across the state aren’t exactly budget-friendly. In New York City, for example, few single-family homes or duplexes are available. Landlords can either buy the entire building (typically 4+ units) or a portion of the units. 

This decision affects whether you need commercial insurance instead of smaller-unit landlord insurance. Though generally more expensive, commercial insurance offers more comprehensive coverage since there’s a higher risk associated with owning a whole multi-unit building. 

Another important consideration in New York and the East Coast in general is that many buildings were built before 1950. Maintaining and updating an old electrical system, plumbing, roof, and more can be expensive. 

The laws surrounding renters rights and maintenance are also strictly enforced in New York. In New York City, tenants have many rights to ensure the safety and quality of their housing. This means properties must be safe, well-maintained, and free from vermin, leaks, and hazardous conditions. It also protects renters from discrimination, harassment, and issues related to window guards, lead-based paint, and smoke and carbon monoxide detectors.

New York landlords must thoroughly review inspection reports to understand the condition of their property prior to purchasing and provide an accurate account to insurance carriers. You don’t want an issue to arise that you didn’t know about and have your insurance claim rejected because of an exclusion on your policy.

In the same vein, not all landlord insurance policies cover circumstances surrounding asbestos, lead paint, or mold. For example, an old electrical system that uses knob and tube wiring (rather than a modern fuse box or circuit breakers) may be excluded from your policy, cause a higher deductible or premium, or even prevent some insurance carriers from being willing to write a policy for the property at all. 

The more you know, the better positioned you are to understand the risks associated with your property, determine how much coverage you need, and find a policy that’s right for you. 

Why is landlord insurance needed?

Before we dive into the specifics of New York, let's take a look at some of the most important reasons why landlord insurance is a must:

1. Property protection: Landlord insurance provides coverage for the physical structure of the rental property itself. This often includes protection against damages caused by fire, storms, vandalism, or other covered perils. Without insurance, landlords would be responsible for paying out of pocket for repairs or rebuilding in case of such damages.
2. Liability coverage: Landlord insurance typically includes liability coverage, which protects landlords in case someone is injured on the rental property and holds the landlord responsible. If the landlord is sued, this coverage can help pay for legal fees and medical expenses.
3. Loss of rental income: If a rental property becomes uninhabitable due to a covered loss (like fire or storm damage), landlord insurance can reimburse lost rental income during the time it takes to repair or rebuild the property. This can be crucial for landlords who rely on rental income to cover mortgage payments and other expenses.
4. Tenant damage: While security deposits can help cover some tenant-caused damages, they often aren't sufficient to cover major repairs or replacements. Landlord insurance may cover unintentional damages caused by tenants, such as excessive wear and tear, accidental damage, or even malicious damage. It’s important to carefully review your policy for the particulars of coverages and exclusions.
5. Legal protection: Landlord insurance may offer legal protection and assistance in the event of disputes with tenants. This can include coverage for legal fees related to eviction proceedings or other legal actions.

Overall, landlord insurance provides peace of mind and financial protection for property owners, helping to mitigate the risks associated with renting out property.

How much insurance do I need for my New York investment property?

While some states and zip codes require minimum coverage or specific policies — as do mortgage companies — choosing how much insurance you buy is primarily a personal decision. 

That said, there are some important factors to consider when setting the limits of your personal property and liability coverage in New York, including:

• Your property’s unique risks: Are you on the coast? Close to a body of water? In a high-rise building? If so, your property may be more susceptible to damage from wind, water, and other natural perils. Be sure to have coverage in place for these types of perils, and ask your agent to recommend other policies or coverages that may help you be more comprehensively protected.

• How much of your personal property is available for tenant use: What personal property can tenants use, and how expensive is this property? This helps determine your personal property limits on a landlord insurance policy.

• Your personal risk tolerance: What makes the most financial sense for you? Are you willing to have a higher deductible for lower premiums?

Answering these questions can help you make a more informed decision about how much coverage makes the most sense for you and your property. That said, some New York-specific considerations should factor into this decision-making process.

Important considerations for New York property insurance

While landlord insurance is not required by law in New York, it’s highly recommended that rental property owners protect themselves and their investments with proper coverage. In some cases, your homeowner's insurance or mortgage provider may also require rental property insurance.

Here are some of the unique insurance considerations for New York landlords:

Snowstorms and excessive winds

If you live on the East Coast, you’re no stranger to winter storms, snow, hail, and wind. When looking for New York landlord insurance, explore whether you’re covered for damages caused by freezing and thawing cycles. 

For example, natural wear and tear from snow damage may not be included in dwelling coverage.

Coastal exposure and hurricanes

While living near the coast has many perks, it can be difficult to get the right coverage in riskier areas, where the property is susceptible to wind and water damage. No one expected New York to be a hurricane zone, but Hurricane Sandy wreaked havoc in NYC in 2012.

Check in advance if wind and hail coverage increase your deductible — and if you’re covered at all for these situations. For landlords in New York City, the advantage of large buildings and skyscrapers is a natural windbreak. 

Natural disaster flooding or water sewer backup

Believe it or not, floods are the biggest natural hazard in terms of lives lost and overall property damage in the U.S. As the global climate changes, New York is not alone in experiencing rising sea levels and flooding along the coastline.

Landlords must be prepared with flood coverage and know whether or not their policy covers general water/sewer backup (included in many standard policies as an optional coverage) or natural disaster flooding (usually as an separate policy). Landlords are often responsible for proper maintenance and pumping for properties upstate using septic tanks and closed systems.

Stay on top of this task and know in advance if your policy covers sewer backup. With a partner like Azibo and our network of agents, natural disaster flood insurance is accessible across 51 jurisdictions and covers all types of flooding scenarios, including your basement (as many traditional flood insurance policies don’t cover below-ground level). 

Tips for lowering your New York landlord insurance premium

Your insurance premium depends on a number of factors, including geographic location, property condition, and prior claims and history. You can change your rates by adjusting your desired coverage limits and deductibles. Here are a few tips to help you lower your New York property insurance premiums:

1. Consider a higher deductible

In New York, you have the option to adjust your standard deductible to lower your topline premium. For this reason, raising your deductible can be a strategic opportunity to lower your premium. That said, be sure you aren’t taking on too big of a deductible in the event that you need to make a large claim. 

2. Require renters insurance for tenants

Another way landlords can better protect themselves and lower premiums is by requiring renters insurance for tenants. While renters insurance is not required by law in New York, some landlords may require it on a case-by-case basis. 

This is an excellent way to set expectations early on, help renters protect their belongings, and protect your investment. In a state like New York where renters rights are taken very seriously, it’s a good idea to guide your tenants in this direction.  

3. Mitigate risk with safety features

The best way to prepare for risk and lower your premiums is with a thoughtful safety plan. Prioritizing safety and security measures means outfitting your property with smoke and carbon monoxide detectors, and installing security and fire alarm systems. 

It also means regularly conducting inspections to ensure tenants follow the lease terms, like not barbecuing on the roof or smoking in the unit. Some carriers may offer discounts for going the extra mile to prioritize safety. Even if they don’t, it’s a good idea to protect yourself and decrease liability by taking more precautions.

4. Relocate strategically if needed

As a rental property owner, you understand the unique pressures of renting your home to tenants — especially on the coast. If you’re considering relocation, opt for an inland property that’s farther away from the water but still in a desirable destination. 

By reducing your property’s risk of flooding or hurricane damage, you can potentially save significant cash on New York property insurance and annual premiums. 

5. Be consistent and thorough about maintenance

In the historic buildings of New York City as well as homes upstate, it’s very important that you’re up to date with building and safety codes. You must know the rules, do regular inspections, and maintain the property to avoid negative repercussions and damage that could have been prevented. 

If you don’t live nearby, it’s worth hiring a property manager to help you stay on top of maintenance. 

Additional New York landlord insurance coverages and policies to consider

With the unique risks New York landlords face, investing in additional coverage on top of your standard landlord insurance can help you and your investment stay protected. Here’s what additional landlord coverages, and policies you may consider:

Loss of rent coverage

While rent loss coverage is optional, it’s highly recommended in a state like New York that has a higher risk of hurricanes, snow storms, and flooding. When a rental property is severely damaged by a natural disaster, accident, or tenant negligence, it becomes uninhabitable and unable to be rented out.

Due to this forced vacancy, landlords can’t collect rent payments and will lose their rental income until the property is repaired. With rent loss coverage, the financial burden of a vacant rental property is less severe so long as the cause of the claim is covered by the policy. 

Umbrella insurance

As with loss of rent coverage, landlords don’t have to get umbrella insurance in New York — but it’s a great idea to have comprehensive liability coverage in this highly populated, litigious state. 

Umbrella insurance helps protect you and your assets in two scenarios: if your primary insurance policy (regular homeowners, landlord, auto, or watercraft policy coverage) doesn’t cover you for a specific scenario, or if you get caught up in an expensive lawsuit that exhausts the financial limits of your primary plan. 

Theft and vandalism coverage

This insurance coverage doesn’t refer to damage by a tenant, but rather if someone breaks in and damages a window, spray paints the walls, or causes other structural damage. While this coverage is also optional, it may be a good idea if you live in a highly populated area that has a higher crime rate like New York City. 

Does landlord insurance cover tenant damage?

Yes, landlord insurance typically covers tenant-caused damages to the premises liability to a certain extent. However, the coverage for tenant damage may vary depending on the specific policy and insurance provider. Here are some common scenarios where landlord insurance may provide coverage for tenant damage:

1. Accidental damage: Landlord insurance policies often cover accidental damages caused by tenants, such as broken windows, damaged appliances, or holes in walls.
2. Malicious damage: In cases where tenants intentionally cause damage to the rental property, such as vandalism or destruction of property, landlord insurance may NOT offer coverage for repairs or replacements.
3. Excessive wear and tear: While normal wear and tear is typically not covered by insurance, excessive wear and tear caused by tenants beyond what is considered normal may be covered under some landlord insurance policies.
4. Loss of rental income: If unintentional and covered tenant damage renders the property uninhabitable and results in loss of rental income, some landlord insurance policies may provide coverage for the lost income during the repair period.
5. Legal expenses: Landlord insurance may cover legal expenses associated with evicting a tenant who has caused damage to the property or pursuing legal action to recover damages.

Landlords need to review their insurance policy carefully to understand the extent of coverage for tenant damage and any limitations or exclusions that may apply. Additionally, landlords should document the condition of the tenant's property both before and after a tenant's occupancy to facilitate the claims process in case of damage.

Partner with a specialized local insurance agent through Azibo

Navigating lengthy property insurance policies is difficult in any state — but especially in New York. Committed to enhancing the landlord experience, Azibo is the only national online commercial insurance producer focused solely on independent landlords. 

Landlord insurance typically costs about 20% more than homeowners insurance. According to NerdWallet, the average cost of homeowners insurance in the U.S. is about $1,820 per year. This would mean the average landlord premium is approximately $2,184 per year. Yet many Azibo customers pay annual premiums under $1,000 for landlord coverage. We’re proud to provide you with quick access to a curated set of high-quality insurance carriers — so you get the right coverage, at the right price. 

Ready to put insurance headaches and hassles in the past? Azibo is here to help. Simplify the New York landlord insurance process and get your free quote today. 

Landlord insurance New York FAQs

How much is landlord insurance in NY?

The cost of landlord insurance in New York can vary significantly depending on various factors such as the location of the rental property, the type of property (single-family home, multi-unit building, etc.), coverage limits, deductible amount, and the insurance provider.

On average, landlords in New York can expect to pay anywhere from a few hundred to several thousand dollars annually for landlord insurance. To get an accurate estimate, it's advisable to contact insurance providers and request quotes based on specific property details and coverage needs.

Is landlord insurance required in New York?

Landlord insurance is not legally required by state law in New York. However, many mortgage lenders may require landlords to carry insurance as a condition of the loan. Additionally, while not mandatory, landlord insurance is highly recommended to protect the investment in rental properties.

Landlord insurance provides coverage for property damage, liability protection, loss of rental income, and other risks associated with renting out property, offering financial security and peace of mind to landlords.

Is renters insurance required in New York?

Renters insurance is not mandated by law in New York State. However, landlords have the right to require tenants to purchase renters insurance as a condition of the lease agreement. Renters insurance provides coverage for tenants' personal belongings, liability protection, additional living expenses in case of a covered loss, and other benefits.

While not legally required, renters insurance is often a wise investment for tenants to protect their belongings and mitigate potential liabilities.

Azibo Insurance Services LLC, a wholly owned subsidiary of Azibo Inc, is a licensed insurance producer. Contact us to discuss your specific insurance needs.

Disclaimer: The information provided in this post does not, and is not intended to, constitute insurance advice; instead, all information, content, and materials are for general informational purposes only. This content may not constitute the most up-to-date insurance information. Readers must contact a licensed insurance agent or company to obtain quotes, advice, and guidance with respect to any insurance matter. No reader, user, or browser of this article should act or refrain from acting on the basis of information herein without first seeking the advice of a licensed insurance producer.