At Hicks Insurance Group, we’ve been protecting Illinois rental property owners since 1998. Our deep understanding of rental property insurance throughout Will County, Chicago, and surrounding areas means we know the unique challenges landlords face—from tenant damage and rent default to liability exposure and local housing regulations. As an independent agency partnering with over 14 top-rated carriers, we compare policies to find you comprehensive protection at competitive rates.
According to the Insurance Information Institute, landlord insurance typically costs 15-25% more than homeowners insurance due to increased liability exposure and the added risk of tenant-occupied properties. However, this additional cost is minimal compared to the financial devastation of facing a major liability claim, property damage, or lost rental income without proper coverage.
What Does Landlord Insurance Cover?
A comprehensive landlord insurance policy (also called dwelling fire or DP-3 policy) provides multiple layers of protection specifically designed for rental properties.
Dwelling Coverage
Dwelling coverage protects the physical structure of your rental property including the building, roof, walls, floors, built-in appliances, and attached structures like garages and porches. If your rental property is damaged by fire, wind, hail, vandalism, or other covered perils, dwelling coverage pays to repair or rebuild up to your policy limits. Unlike homeowners insurance which uses replacement cost by default, landlord policies offer both replacement cost and actual cash value options—we strongly recommend replacement cost coverage to ensure you can fully rebuild after a major loss.
Loss of Rental Income Coverage
Loss of rental income coverage (also called fair rental value coverage) is one of the most valuable components of landlord insurance. If your rental property becomes uninhabitable due to a covered loss and you can’t collect rent while repairs are being made, this coverage reimburses you for lost rental income. Most policies pay up to 12 months of lost rent or a specified dollar amount. For example, if a fire forces your tenants to vacate for four months while the property is rebuilt, loss of rental income coverage ensures you continue receiving the monthly rental payments you depend on.
Liability Protection
Liability coverage protects you financially if a tenant, guest, or visitor is injured on your rental property or if you’re sued for property damage or negligence. Common scenarios include a tenant slipping on icy steps, a child injured on your property’s playground equipment, or a tenant suing you for discrimination or wrongful eviction. According to the National Association of Insurance Commissioners, landlord liability exposure is significantly higher than homeowner liability due to tenant turnover, property access issues, and regulatory compliance requirements.
Standard landlord policies include $300,000 to $1,000,000 in liability coverage. We recommend at least $1,000,000 in coverage, with many landlords opting for Umbrella Insurance to provide an extra $1-5 million in protection. Liability coverage pays for legal defense costs, settlements, and judgments up to your policy limits.
Property Coverage for Landlord’s Contents
While tenant belongings aren’t covered by landlord insurance (they need their own Renters Insurance), your policy covers property you own at the rental such as appliances, lawn equipment, tools, and furniture provided with the rental. If you offer furnished rentals or maintain equipment on-site, ensure adequate contents coverage.
Other Structures Coverage
Other structures coverage protects buildings on your rental property that aren’t attached to the main dwelling, such as detached garages, storage sheds, fences, and gazebos. This coverage is typically 10% of your dwelling coverage but can be increased if needed.
Vandalism and Malicious Mischief Coverage
Vandalism coverage protects your rental property from intentional damage caused by tenants or third parties. This includes graffiti, broken windows, destroyed appliances, and malicious property damage. If a tenant trashes your property before moving out or vandals target your vacant rental, vandalism coverage pays for repairs. This coverage is particularly valuable for landlords with high tenant turnover or properties in urban areas.
Building Code Upgrade Coverage
If your rental property is damaged and local building codes have changed since it was built, you may be required to upgrade to current standards during repairs. Building code upgrade coverage (also called ordinance or law coverage) pays for these additional costs. This is especially important for landlords with older properties in Illinois where building codes are regularly updated for safety and energy efficiency.
Who Needs Landlord Insurance in Illinois?
Every Illinois property owner renting out their property needs specialized landlord insurance:
- Single-Family Home Landlords – If you rent out a house you own, your standard homeowners policy won’t cover tenant-related risks or lost rental income. Landlord insurance is essential for proper protection.
- Multi-Family Property Owners – Owners of duplexes, triplexes, and small apartment buildings face higher liability exposure and need coverage for multiple units and increased tenant traffic.
- Condo Rental Owners – If you rent out a condo you own, you need landlord insurance to supplement your HO-6 policy with tenant-related liability and loss of rent coverage.
- Vacation Rental Owners – Short-term vacation rentals (Airbnb, VRBO) have unique coverage needs including commercial liability, frequent guest turnover, and higher property damage risk.
- Accidental Landlords – If life circumstances forced you to rent out your former primary residence, you must switch from homeowners to landlord insurance. Failing to do so can result in denied claims.
How Much Landlord Insurance Do You Need?
Determining the right amount of landlord insurance requires assessing your property value, rental income, and liability exposure:
Dwelling Coverage: Set your dwelling coverage equal to the full replacement cost of your rental property based on current construction costs, not market value. Consider square footage, construction materials, and local labor costs. Illinois construction costs vary significantly between urban Chicago and suburban Will County areas.
Loss of Rental Income: Choose coverage that equals at least 12 months of rent to protect against extended vacancies during major repairs. If your property generates $1,800 monthly rent, carry at least $21,600 in loss of rental income coverage.
Liability Coverage: We recommend minimum $1,000,000 in liability coverage for most landlords. If you own multiple rental properties or have significant personal assets, consider $2,000,000 in coverage or add Umbrella Insurance for broader protection.
Contents Coverage: If you provide appliances, furniture, or maintain equipment on-site, ensure adequate contents coverage to replace these items if damaged or stolen.
Deductibles: Common deductibles range from $1,000 to $5,000. Higher deductibles reduce your premium but increase out-of-pocket costs when filing claims. Balance savings against your ability to cover the deductible.
Illinois-Specific Landlord Insurance Considerations
Tenant Rights and Landlord Liability
Illinois has strong tenant protection laws that create additional liability exposure for landlords. The Chicago Residential Landlord and Tenant Ordinance and statewide regulations cover security deposits, habitability standards, discrimination protections, and eviction procedures. Violating these laws can result in lawsuits and penalties. Adequate liability coverage protects you from claims related to wrongful eviction, discrimination allegations, security deposit disputes, and habitability issues.
Severe Weather and Property Damage
Illinois landlords face significant weather-related risks including tornadoes, severe thunderstorms, hail, flooding, and winter freeze damage. Ensure your policy covers wind and hail damage, which is particularly common in Will County. Frozen pipe coverage is essential for Illinois winters—vacant properties are especially vulnerable. Consider adding water backup coverage for rental properties with basements, as sewer backups are common in older Illinois homes.
Vacancy Provisions
Most landlord policies have vacancy provisions that limit or exclude coverage if your property is vacant for more than 30-60 consecutive days. If you’re renovating a property or experiencing extended vacancy between tenants, notify your insurer to maintain continuous coverage. Some carriers offer vacant property insurance for longer vacancies.
Additional Coverage Options for Landlords
Rent Guarantee Insurance
Rent guarantee insurance (also called rent default insurance) protects you if tenants stop paying rent. Unlike loss of rental income coverage which only applies after a covered property loss, rent guarantee insurance covers non-payment due to tenant default. This coverage typically requires tenant screening and lease agreement approval.
Flood Insurance
Standard landlord policies exclude flood damage. If your rental property is in a flood-prone area or has a basement, consider adding Flood Insurance through the National Flood Insurance Program or a private carrier. According to FEMA, 20% of flood insurance claims come from properties outside high-risk flood zones.
Equipment Breakdown Coverage
Equipment breakdown coverage protects mechanical systems like HVAC units, water heaters, boilers, and electrical panels from sudden breakdowns. This coverage is valuable for landlords responsible for maintaining these expensive systems.
Why Choose Hicks Insurance Group for Your Landlord Insurance?
Since 1998, Hicks Insurance Group has been helping Illinois rental property owners protect their investments with comprehensive, affordable landlord insurance. Our local expertise in Will County and Chicago-area rental markets means we understand the unique challenges landlords face—from tenant screening and lease compliance to property maintenance and local regulations. As an independent agency partnering with over 14 top-rated carriers, we compare multiple options to find you the best coverage at competitive rates.
Our commitment to exceptional service has earned us a perfect 5-star rating from over 1,414 satisfied customers. Whether you own a single rental property or a portfolio of units, our experienced agents will assess your specific needs, recommend appropriate coverage, and provide ongoing support as your rental business grows. We also offer bundling discounts when you insure multiple properties or combine landlord coverage with your personal Auto Insurance.
Frequently Asked Questions About Landlord Insurance
What’s the difference between landlord insurance and homeowners insurance?
Landlord insurance covers properties rented to tenants and includes coverage for tenant-related risks like lost rental income, higher liability exposure, and vandalism. Homeowners insurance is designed for owner-occupied properties and doesn’t cover rental income loss, tenant liability, or tenant-caused damage. If you rent out a property and maintain homeowners insurance instead of landlord insurance, you risk having claims denied. Always notify your insurer when you begin renting a property so they can convert your policy to landlord coverage.
Does landlord insurance cover tenant belongings?
No. Landlord insurance only covers the building structure and your property (appliances, equipment, furnishings you provide). Tenant belongings are not covered under your landlord policy—tenants need their own Renters Insurance to protect their personal property. Many landlords now require tenants to carry renters insurance as a lease condition to ensure tenants can replace their belongings after a loss and reduce your liability exposure.
How much does landlord insurance cost in Illinois?
Landlord insurance in Illinois typically costs $1,500 to $3,500 per year for a single-family rental property, though costs vary based on property value, location, coverage limits, deductible, tenant screening policies, and claims history. This is approximately 15-25% more than homeowners insurance due to increased risks associated with rental properties. Multi-family properties and vacation rentals typically cost more due to higher liability exposure. Our independent agents compare rates from over 14 carriers to find you competitive pricing with comprehensive coverage.
What if my rental property is vacant between tenants?
Most landlord policies have vacancy clauses that limit coverage if your property is vacant for more than 30-60 consecutive days. During extended vacancies, coverage for vandalism, theft, and certain types of damage may be excluded. Notify your insurance agent immediately when your property becomes vacant. Some insurers offer endorsements to maintain full coverage during vacancies, while others specialize in vacant property insurance. Never leave a rental property uninsured during vacancy periods, as vacant properties face higher risks of vandalism, theft, and weather damage.
Do I need landlord insurance if I only rent out one room in my house?
If you rent out a room in your primary residence, you may need to add an endorsement to your homeowners policy or convert to a hybrid homeowner-landlord policy. Standard homeowners insurance typically doesn’t cover rental income loss or provide adequate liability protection for tenant-related claims. Contact us to review your situation—we’ll help determine whether you need a policy endorsement, hybrid coverage, or full landlord insurance based on how much of your property you’re renting and your specific circumstances.
Get Your Free Landlord Insurance Quote Today
Protecting your rental property investment starts with the right insurance coverage. At Hicks Insurance Group, we compare rates from over 14 top-rated carriers to find you comprehensive landlord insurance at competitive prices.
Get started with a free quote: Call (708) 532-7474 or visit us at 19144 88th Avenue, Mokena, IL 60448. Hours: Monday-Thursday 9:00 AM – 5:00 PM, Friday 9:00 AM – 4:00 PM.
Our experienced agents will assess your rental property, discuss your coverage needs, and provide personalized recommendations. Whether you’re a first-time landlord or own multiple properties, we’ll help you secure the protection you need with confidence.
