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One of the most overlooked parts of owning a rental property is insurance — until something goes wrong.
Not having the right coverage can turn a small issue into a financial disaster.
I’m Mendell Gosnell with Centurion Real Estate Management, and in this BLOG, we’ll cover the types of insurance every rental property owner should have, what’s often missing, and how to make sure you’re fully protected.
THE BASICS: LANDLORD INSURANCE
First and foremost, you’ll want a Landlord Insurance Policy.
This is not the same as homeowners’ insurance — it’s specifically designed for rental properties.
It covers the structure, loss from fire, storms, or vandalism, and often loss of rental income if the property becomes uninhabitable after a covered event. Check with your insurance agent on this.
Homeowner policies typically won’t cover tenant-occupied properties — so this is step one.
Side Note: If you don’t have a great insurance agent or want to shop around or find a great local agent – let us know and we would be happy to recommend a few great local insurance agents.
LIABILITY COVERAGE
Next, make sure your policy includes liability protection.
This covers you if someone is injured on the property and claims you’re at fault — whether it’s a tenant, guest, or maintenance worker.
Centurion typically recommends at least $500,000 to $1 million in liability coverage for most rental properties.
LOSS OF RENTAL INCOME
Many landlords forget this one — Loss of Rental Income coverage.
If your property becomes unlivable due to a covered loss, this pays your lost rent while repairs are made.
It protects your cash flow and helps you stay financially stable during a setback.
OPTIONAL COVERAGES TO CONSIDER
Depending on your property and location, there are several optional coverages worth adding:
Water and sewer backup coverage – common in older homes and rainy Oregon winters.
Equipment breakdown coverage – covers HVAC, water heaters, or major systems.
Vandalism or tenant damage endorsements – especially for multi-family or higher turnover units.
Flood or earthquake insurance – these are not included in standard policies.
These can make the difference between a covered repair and a huge personal loss.
REQUIRE TENANT RENTERS INSURANCE
One of the best ways to reduce your risk is to require tenants to carry renters insurance.
This protects their personal belongings — and provides liability coverage for accidents they cause, like kitchen fires or water leaks.
Property Manager Feedback:
Great Property Management companies like Centurion will handle this for you. They will coordinate the whole process with the tenants from start to finish and oversee the compliance and enforcement. Yeah, pretty cool – I know.
UMBRELLA POLICY
Finally, consider an umbrella policy.
This adds an extra layer of liability protection — usually $1–$2 million — that sits on top of your existing coverage.
It’s relatively inexpensive and can protect your personal assets if a lawsuit exceeds your main policy limits.
EXPERT ADVICE: Some investors might call this the cheapest insurance out there and a real no-brainer especially as you get further along in your investing career and begin to build your portfolio of investment properties.
Expert Investor Pro Tip: These days with the ease of use of AI – you can use something like ChatGPT or another software and input your Insurance Policy and have it give you feedback on the strengths and weaknesses and make any recommendations on your coverage limits and options.
Good Luck!!!
Happy Investing
-Mendell Gosnell
