Short answer: There is no official national landlord average from the NAIC. The NAIC's 2023 countrywide HO-3 (owner-occupied) average was $1,737/yr, and dwelling-fire averaged $1,019/yr — useful context, not your quote. FirstDoor often models about $1,200/yr on a $200k example and stress-tests higher; get DP quotes for the address.
Definition
Landlord / rental property insurance is coverage for a tenant-occupied dwelling (often a DP-1/2/3 form), including the building, liability and often loss of rents — not the same as an owner-occupied HO-3 homeowners policy.
By the numbers: The NAIC 2023 countrywide average HO-3 premium was $1,737/yr (owner-occupied, not landlord). A Federal Reserve FEDS Note found multifamily insurance rose from about $39 to $68 per unit per month from 2019 to 2024 in real terms.
Landlord insurance vs homeowners
Homeowners insurance (often an HO-3 form) is built for a house you live in. Landlord / dwelling policies (often DP-1, DP-2 or DP-3) are built for a house you rent out. The big differences for investors:
| Dwelling / structure | Pays to repair or rebuild the building after covered perils (fire, wind, etc.). Quoted on rebuild cost, not what you paid for the house. |
| Fair rental value / loss of rents | Can replace lost rental income while the unit is unlivable after a covered claim — HO-3 usually does not. |
| Liability | Covers lawsuits from injuries on the property (slip-and-fall, etc.). Limits matter; many landlords carry $300k–$1M+. |
| Tenant's stuff | Usually not on your policy. Tenants need their own renters insurance (HO-4) for personal belongings. |
Good to know: DP-1 is often named-peril / more basic; DP-3 is typically broader "open peril" on the dwelling (subject to exclusions). Exact coverage depends on the carrier and endorsement list — get quotes, don't guess from the form letter alone.
What official data actually shows
There is no official national "landlord insurance average" from the NAIC or the Insurance Information Institute for a typical single-family DP-3. Use these as context benchmarks only:
| NAIC HO-3 (2023) | Countrywide average premium for owner-occupied HO-3 homeowners policies: $1,737/yr. This is not a landlord policy. |
| NAIC dwelling fire (2023) | Countrywide average for dwelling-fire (DW) forms in the same report: $1,019/yr. DW covers less than a full homeowners package and is still not a modern landlord quote. |
| Fed multifamily (2019→2024) | Average insurance for apartment buildings rose from about $39 to $68 per unit per month in real terms (~75%+). About 72¢ of each extra insurance dollar hit owner NOI. |
Red flag: Treating the HO-3 national average as "what my rental will cost." Single-family landlord quotes are property-specific: rebuild cost, ZIP catastrophe risk, vacancy, claims history and liability limits move the number a lot.
What drives the premium
Carriers price the risk of rebuilding and lawsuits — not your purchase price.
| Rebuild cost | Materials and labor to replace the structure today, often higher than market value in soft markets. |
| Location / catastrophe | Wind, hail, hurricane, wildfire and flood zones push premiums (and sometimes require separate policies). |
| Vacancy & use | Empty or short-term rental use can change eligibility and price vs a long-term lease. |
| Liability limits & deductible | Higher liability limits cost more; a higher deductible lowers the premium but raises your out-of-pocket on a claim. |
Tip: Ask for the replacement-cost estimate on the quote and compare it to a local contractor or insurance agent's rebuild calculator — underinsuring the dwelling is a common first-landlord mistake.
How insurance hits cash flow
Insurance is an operating expense, so it lowers NOI, cash flow, cash-on-cash, cap rate and DSCR. FirstDoor examples often use about $1,200/yr on a $200k deal as an illustrative underwriting input — not a quoted average. Stress-test higher, especially in catastrophe-prone markets.
Same $200,000 house at $2,000/mo, 20% down at 7.40% (Freddie Mac average, October 15, 2026), FirstDoor defaults (5% vacancy, 5% maintenance, 8% management):
| Insurance | Cash flow | Cash-on-cash | DSCR |
| $600/yr ($50/mo) | $282/mo | 7.4% | 1.25 |
| $1,200/yr ($100/mo) | $232/mo | 6.1% | 1.21 |
| $1,800/yr ($150/mo) | $182/mo | 4.8% | 1.16 |
| $2,400/yr ($200/mo) | $132/mo | 3.4% | 1.12 |
Moving from $600/yr to FirstDoor's $1,200/yr example cuts cash flow by about $50/mo and cash-on-cash from 7.4% to 6.1%. At $2,400/yr, cash flow falls to about $132/mo and cash-on-cash to 3.4%.
Tip: Try the same listing at different insurance amounts in the free cash-flow calculator or the full deal score.
How to underwrite insurance
1. Get landlord (DP) quotes early — before you remove inspection contingencies if possible.
2. Budget above HO-3-ish national benchmarks in high-risk ZIPs; the Fed's multifamily jump ($39→$68/unit/mo) is a reminder costs have been rising fast.
3. Underwrite the purchase at your best quote and a higher stress case (for example $1,800–$2,400/yr on a small SFR).
4. Require tenants to carry renters insurance; it protects their belongings and can reduce friction after a small unit claim.
5. Re-shop at renewal — premiums and carrier appetite change year to year.
Good to know: This is educational, not insurance advice. Coverage forms, exclusions and prices are set by carriers and your state's rules. Compare written quotes for your address.
Worked example
A $200,000 single-family rental at $2,000/mo, 20% down at 7.40% for 30 years (Freddie Mac average, October 15, 2026), $2,400/yr tax, FirstDoor's illustrative $1,200/yr insurance, 5% vacancy, 5% maintenance, 8% management. Closing costs assumed at $6,000. Illustrative deal so insurance swings are easy to see.
| Insurance (base) | $1,200/yr |
| Insurance stress | $2,400/yr |
| Operating costs @ base | −$660 |
| Mortgage (P&I) | −$1,108 |
Frequently asked questions
How much does landlord insurance cost?
There is no official national landlord average from the NAIC. The NAIC's 2023 countrywide HO-3 (owner-occupied) average was $1,737/yr, and dwelling-fire averaged $1,019/yr — useful context, not your quote. FirstDoor often models about $1,200/yr on a $200k example and stress-tests higher; get DP quotes for the address.
Is landlord insurance the same as homeowners insurance?
No. HO-3 covers an owner-occupied home. Landlords usually need a dwelling/landlord policy (often DP-1/2/3) that can include loss of rents and is priced for tenant-occupied risk. Tenants still need their own renters policy for personal property.
How does insurance affect rental cash flow?
Every dollar of premium is an operating expense, so it lowers NOI, cash flow, cash-on-cash and DSCR. On FirstDoor's $200k / $2,000-rent example at current Freddie Mac rates, raising insurance from $1,200 to $2,400/yr cuts monthly cash flow by about $100 and roughly halves cash-on-cash versus the low $600 case.
Keep learning
Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.