Major Insurance Trends Landlords Need to Watch For This Year

2. Stricter Lender Insurance Requirements

As lending standards evolve, many lenders now require higher liability limits and additional endorsements before approving loans for rental properties. Key insurance requirements include:

• Property insurance: Coverage must meet or exceed the property’s insurable value, often requiring an “all-risk” policy.
• Liability coverage: Higher limits protect against potential lawsuits.
• Flood & endorsements: Flood insurance is mandatory in designated zones, and ordinance coverage may be required to meet updated building codes.
• Deductibles: Lenders may set a maximum deductible limit, typically 2% or less of the insured value.

Check with your lender early to ensure compliance and avoid closing delays. Nothing is worse than finding out that your insurance costs need to change leading up to closing day, and you may not qualify now. 

3. Short-Term vs. Long-Term Rental Coverage

Investors exploring different rental strategies must understand the insurance implications of each. Short-term rentals (such as Airbnb and Vrbo) often require specialized policies, as standard landlord insurance may exclude coverage for frequent guest turnover, liability risks, and property damage caused by short-term guests. Some insurers require an additional STR endorsement or a separate vacation rental policy to ensure complete protection.

With Steadily, short-term rental investors can access customized insurance solutions for Airbnb and vacation rental hosts. Whether you’re operating a full-time STR or renting your property occasionally, ensuring the right coverage now can save you from significant financial risks later.

4. Inflation and Replacement Costs

Materials and labor costs have surged over the past few years, leading many insurers to adjust policy pricing. If you haven’t reviewed your replacement cost coverage recently, now is the time. Ensuring your policy reflects current construction costs can prevent underinsurance issues if there’s a loss. Investors should also look into inflation protection riders to keep their coverage in line with market conditions.

5. Use an Insurance Calculator for Smarter Deal Analysis

While evaluating a potential investment property, it’s essential to factor in insurance costs as part of the overall deal analysis. The Steadily x BiggerPockets Insurance Calculator helps investors estimate landlord insurance costs upfront, ensuring they accurately project expenses, cash flow, and ROI before purchasing a property.

Final Thoughts

Spring presents an exciting opportunity for real estate investors, but success goes beyond simply acquiring a property. Having the right landlord insurance policy from Steadily protects your investment from unexpected financial setbacks. Whether purchasing your first rental property or expanding your portfolio, understanding these key insurance considerations will help you mitigate risks and maximize returns.