Landlord insurance in Louisiana

How much you pay for landlord insurance varies depending on a range of factors, including the property you are insuring and its location. However, coverage generally costs 15% to 25% more than the average price of standard homeowners insurance, which is $6,939 for a property in Louisiana with a replacement cost value of $350,000. 

If you're a landlord in Louisiana, consider the following endorsements or stand-alone policies to further protect your investment:

• Flood insurance. Mandatory in flood zones. Standard policies exclude flood damage.

• Sewer/water backup. Covers damage from sewer backups or sump overflows.

• Loss of rental income. Covers lost rent during property repairs after a covered loss.

• Sinkhole/subsidence coverage. Crucial in areas with soil instability, especially in areas of Louisiana where salt domes exist. 

• Vandalism and malicious damage by tenant. For intentional damage not covered by standard liability.

• Ordinance or law coverage. Pays for bringing rebuilt property up to current codes.

How much you pay for coverage will vary based on a range of factors, including: 

• Location. Properties in high-risk areas, such as coastal communities, flood zones, or areas with frequent crime, are often more expensive to insure.

• Building characteristics. The age, size, and materials used to construct the building will be used to determine the property’s replacement cost value and risk level, both of which will affect premiums. 

• Number of units. The number of units in the build will affect your rate, with single-family units generally less expensive to insure than multi-family units.

• Tenant type. Premiums may be lower for long-term rentals, while those designed for short-term stays or geared towards students may cost more. 

• Coverage & deductible levels. How much coverage you need will directly impact your rates, with higher limits leading to higher premiums. Likewise, your deductible will further influence your rate. Higher deductibles can lead to lower premiums, though you’ll pay more out of pocket after a claim.

• Safety and security systems. Alarms, sprinklers, water detection systems, and storm-resistant features can lower your premium. The same is true for burglar alarm systems.

A typical landlord insurance policy in Louisiana generally does not cover:

• Tenants’ personal property. Tenants must purchase renters' insurance to cover their personal property. 

• Wear and tear. Your policy won’t cover the repair or replacement of systems, components, and structures due to normal wear and tear.

• Eviction or legal costs. Standard policies don’t cover eviction proceedings.

• Earthquakes and sinkholes. Earth movements, including earthquakes and sinkholes, are not covered, though you can purchase a separate policy or add an endorsement to enhance coverage. This requires separate policies or endorsements.

• Intentional tenant damage. If a tenant intentionally damages your rental property in Louisiana, your policy won’t cover it.

• Flood damage. Damage caused by storm surges, overflowing bodies of water, and other instances where a standard landlord insurance policy does not cover water entering the property. You must purchase a separate flood insurance policy or add a policy endorsement to your existing coverage.

The right amount of landlord insurance depends on your property type, location, and rental setup. In Louisiana, where hurricanes, flooding, and windstorms are common, it’s essential to ensure your policy fully protects your investment. At a minimum, consider:

• Dwelling coverage. Consider carrying enough dwelling insurance to cover the cost of rebuilding should a covered peril destroy your property.
  

• Other structures. This part of your policy covers the cost of rebuilding other structures on your property, like a detached garage. Limits are often set at 10% of your property limit, but you may need more coverage based on the value of any additional insurable structures on the property. 

• Liability protection. Liability insurance can help pay for medical expenses if someone is injured on your property, and repairs/replacements if you’re at fault for damaging their property. It also covers any associated legal costs. You should carry enough liability insurance to protect your assets after an incident.
  

• Loss of rental income. Reimburses lost rent if the unit becomes unlivable after a covered loss. You should carry enough coverage to replace the fair rental value of your property for an extended period, such as 12 to 24 months.
  

• Personal property. Covers landlord-owned appliances or furniture provided to tenants. Consider a personal property coverage limit to cover the value of your insurable belongings.  

If your property is in a coastal or flood-prone area, add flood insurance and a hurricane deductible buy-down to minimize out-of-pocket costs after a storm.

If you live in the property you rent, you may need to carry both landlord and homeowners insurance or a policy like Kin’s House & Property coverage, which can cover your insurance needs as a homeowner and a landlord. 

Contact a licensed company in Louisiana to determine the type of coverage best suited to your needs and rental intentions. 

Landlord insurance is not legally required in Louisiana, but you may need it if you financed your property purchase. Lenders generally require proof of insurance as part of the lending agreement. 

Once you repay the loan, you can typically drop insurance coverage, but it’s generally best to maintain your policy.  Insurance can protect you and your property from a range of potentially significant financial losses, including fires, storms, and legal expenses after a liability issue.