Insurance Premium Gone Up? Learn How to Budget For Landlord Insurance in 2026
Key Takeaways
- Landlord insurance rates are expected to stay elevated through 2026, so plan for higher renewal premiums in your operating budget.
- The biggest drivers of higher premiums are catastrophic losses, higher rebuild costs, rising liability expenses, and tighter insurer/reinsurance capacity.
- Compare your quote to average rates in your area to confirm whether the increase is market-wide or driven by your specific property, claims history, or coverage choices.
- Track your premiums cleanly so you don’t miss important rental property deductions at tax time, which can help offset higher insurance costs.
Landlord insurance premiums have climbed in recent years—and many owners will see rates stay elevated through 2026. The main reasons are more frequent catastrophe losses (storms, wildfires, floods), higher rebuilding costs from inflation, rising liability expenses, and a tighter insurance market driven by limited carrier availability and higher reinsurance pricing.
This guide breaks down what’s driving the increases, how to budget for them, and practical ways to reduce costs without sacrificing the coverage that protects your rental income.
Why Has Landlord Insurance Gone Up?
Average landlord insurance rates have risen in recent years and are expected to keep increasing into 2026 due to several connected pressures across the insurance market.
A key driver is the growing frequency and intensity of extreme weather and natural disasters. Floods, hurricanes, and wildfires have pushed claim costs higher, leading insurers and insurance carriers to raise premiums to match greater risk exposures. Even landlords outside disaster-prone areas can feel the impact, as insurers often spread losses across larger portfolios. Inflation and higher rebuilding costs are also major contributors. Materials and labor have increased in price, which raises the cost to repair or replace damaged property and ultimately drives up policy pricing and premium rates.
Liability risk is another factor, along with more frequent claims. Rentals often present higher liability exposure than owner-occupied homes, and rising legal fees and medical costs tied to liability claims (including claims involving injured tenants) can further increase premiums.
The insurance market itself has also become more constrained. Some insurers have pulled out of higher-risk regions or limited availability, reducing competition. Meanwhile, higher reinsurance costs—what insurers pay for their own protection—are commonly passed on to policyholders. On top of that, many landlords are choosing more robust coverage, such as lower deductibles, longer loss-of-rent coverage, or higher liability limits, which can raise premiums as well.
Overall, when we reflect on why has landlord insurance gone up, this is a problem stemming from a combination of risk-based pricing, inflation, liability trends, and tighter market conditions. Knowing what’s driving these changes can help landlords plan budgets and review coverage decisions more confidently in 2026—especially across rental homes and small portfolios of rental units.
How Landlords Can Budget for Higher Insurance Costs
As landlord insurance rates continue to rise in 2026, budgeting proactively will protect your cash flow and prevent surprise expenses. Knowing why landlord insurance has gone up—whether it be from climate-related risk and inflation or higher rebuilding and liability costs—allows landlords to plan more realistically and adjust their financial goals accordingly.
One effective approach is to build insurance increases directly into your annual operating budget. Reviewing your policy at renewal and comparing it to average landlord insurance rates in your area can help set expectations and identify whether a rate hike is market-wide or specific to your property (property address, claims history, and coverage limits). Planning for modest year-over-year increases can reduce financial strain and help stabilize long-term projections—whether you own one duplex or you’re among commercial landlords with multiple properties.
You should also consider whether a rent increase could help cover higher insurance costs while still staying competitive in the local market. In some situations, gradually factoring these added expenses into rental income is more sustainable than paying the full increase out of pocket—especially in high-demand areas where renters may be more willing to absorb modest adjustments.
There is some good news, too: Landlord insurance premiums are generally tax deductible as ordinary and necessary business expenses. Properly tracking insurance payments as part of your rental property deductions can help reduce taxable income and partially offset higher premiums at tax time.
Ways to Lower Landlord Insurance Costs
While landlord insurance rates are rising nationwide, there are still practical ways landlords can control costs and avoid overpaying for coverage in 2026.
Increasing Deductibles & Managing Risks
One of the simplest ways to lower premiums is by increasing your deductible. Choosing a higher deductible reduces the risk the insurer assumes and can lead to lower annual costs, though it means you’ll pay more out of pocket if you file a claim. In practice, the landlord insurance deductible can be structured as a flat deductible (a fixed deductible amount) or, in some markets, as a percentage deductible for wind/hail—either way, deductible choices can materially impact premium price.
Mitigating risk factors is another way to lower your premium. Good risk management strategy includes keeping your property well maintained, repairing structural problems, or adding safety features. All of these steps can improve your risk profile and appeal more to insurers. The same upgrades that reduce claims can also help you qualify for lower premiums and landlord insurance discounts (for example, modernized roofs, updated electrical, or water-leak shutoff devices).
Bundling Policies & Qualifying for Discounts
Another effective approach is bundling policies. Many insurance companies offer discounts when you combine landlord insurance with other policies like auto or umbrella coverage, or when you insure multiple properties with the same carrier. Bundling can lead to multi-policy savings and streamline your overall insurance management, especially if you’re coordinating across multiple rental units.
Comparing Policies & Reviewing Annual Coverage
Landlords looking for the best insurance prices should compare policies and revisit their coverage every year. Getting quotes from multiple providers can help you avoid paying more than typical landlord insurance rates and make it easier to spot discounts you might otherwise miss. An annual review also gives you a chance to fine-tune your limits based on current needs, so you’re protected without paying for coverage you no longer need.
When comparing quotes, pay attention to the core property coverage (including dwelling coverage), the liability portion, and any additional coverage options like loss-of-rent extensions, water backup, equipment breakdown, or ordinance/law. Also confirm whether the policy covers tenants property at all (most do not) and encourage tenants to carry renters insurance policies to protect their own belongings.
Are Landlord Insurance Premiums Tax Deductible?
Yes! Landlord insurance premiums are generally tax deductible as ordinary and necessary business expenses for rental property owners. Landlords can typically deduct the cost of insurance policies that protect their rental properties, including landlord insurance, liability coverage, flood insurance, and loss-of-rent coverage. These deductions can help offset rising landlord insurance rates and reduce overall taxable rental income.
In general, you can deduct insurance premiums that are ordinary and necessary for operating and protecting your rental activity. Common examples include:
- Landlord/property (hazard) insurance for the rental dwelling and attached structures (home insurance cover for rental activity)
- General liability insurance tied to the rental property
- Loss-of-rents / fair rental income protection (often called “loss of use”)
- Umbrella liability insurance (to the extent it relates to your rental activity)
- Flood insurance (including NFIP policies) and certain wind/hurricane endorsements
- Landlord-required coverage that’s part of a lender escrow arrangement (still your expense)
- Workers’ comp (if you have employees for the rental business)
As average landlord insurance rates increase, properly tracking insurance expenses becomes even more important. Insurance premiums should be recorded as part of your annual operating expenses and included among your eligible rental property deductions when filing taxes, typically on Schedule E (Form 1040).
Keeping accurate records of insurance payments throughout the year ensures landlords don’t miss this deduction and can help partially offset higher premiums during the 2026 tax season.
Being Organized and Using Financial Tools
A good rental accounting setup is boring by design. It’s consistent, easy to maintain, and hard to break. Start by separating rental activity from personal spending, then use the same expense categories every time such as repairs, maintenance, utilities, insurance, HOA, vendor/professional fees, etc. Save receipts and invoices immediately and store them in one place, ideally attached to the transaction, so every expense is traceable without digging through emails later.
Most bookkeeping problems come from delay. A quick weekly check-in keeps your numbers accurate and your decisions timely. Review new transactions, confirm categories, split mixed purchases when needed, and flag anything unusual. Staying current also makes it easier to see what’s really happening, such as cash flow, rising maintenance costs, and which properties are performing well while there’s still time to act.
It’s always helpful to use landlord-specific tools to speed up reporting and tax prep. Hand-built spreadsheets can work, but they’re slow and error-prone as you add units. Landlord-focused tools should automate income/expense tracking, keep everything organized by property, and generate clear reports.
If you want to reduce admin time, choose software that also supports tax-ready outputs so you’re not reformatting your books when tax season hits. Ledgre is designed for this workflow, with automated tracking, multi-property organization, and reporting built for landlord.
Conclusion
Landlord insurance rates are expected to remain elevated into 2026, and understanding why has landlord insurance gone up—from climate-driven losses and higher rebuild costs to tighter underwriting—helps landlords plan with fewer surprises. By comparing average landlord insurance rates, reviewing coverage annually, and baking increases into your operating budget, you can protect cash flow while staying properly insured. Finally, keep clean records so premiums are captured as rental property deductions, helping offset higher costs at tax time.
FAQs
Why has landlord insurance gone up?
Landlord insurance has gone up in the last few years due to several factors: extreme weather and natural disasters, more frequent claims, and a more constrained insurance market as insurers pull out of higher-risk, reducing competition. Overall, this is a problem stemming from a combination of risk-based pricing, inflation, liability trends, and tighter market conditions.
What’s causing landlord insurance premiums to rise in 2026?
Landlord insurance has gone up mainly because catastrophe losses (wildfires, hurricanes, floods) are increasing, rebuilding costs (labor + materials) remain elevated, and insurers are facing higher reinsurance costs. In many states, carriers have also reduced exposure or exited markets, which can mean less competition and higher pricing—and, for some owners, higher landlord insurance costs driven by local risk and claims trends.
How much should I expect my landlord insurance to increase at renewal?
There’s no universal number, and the median cost can vary widely by region and property type. Many landlords should plan for year-over-year premium increases, especially in higher-risk regions or for older properties. A practical budgeting approach is to build an annual insurance “inflation buffer” into your operating expenses and compare your renewal quote against local average landlord insurance rates to see if the change is market-wide or property-specific. If you’re trying to estimate how much landlord insurance might be for your specific rental, ask each insurer to quote the same limits, deductible amount, and loss-of-rent period to get apples-to-apples estimated cost comparisons.
Can I lower my landlord insurance without losing essential coverage?
Yes—often by adjusting structure rather than stripping protection. Common levers include raising your deductible, improving property risk factors (roof, electrical, plumbing), and keeping claims low. The goal is to reduce premium while protecting the big risks (liability, major property damage, and meaningful loss-of-rent coverage). Also check for any waiting period on certain coverages or endorsements when switching insurance carriers, so you don’t create a short-term gap.
What discounts do landlords commonly miss?
Landlords frequently overlook savings tied to bundling policies, insuring multiple properties with the same carrier, and protective device credits (smoke detectors, monitored alarms, water shutoff/leak sensors). It’s also worth asking about new policyholder/loyalty discounts and whether a carrier offers risk mitigation credits after upgrades.
Are landlord insurance premiums tax deductible?
Yes–Landlord insurance premiums are tax deductible in most cases. Premiums are ordinary and necessary rental expenses and are typically reported on Schedule E (Form 1040) for rental property activity.
What’s the easiest way to track insurance expenses across multiple rentals?
The simplest system is one that prevents missed deductions and messy categorization: separate bank accounts for rental activity, consistent expense categories, and transaction-level documentation (receipts/invoices). Using landlord-specific accounting software like Ledgre can help by automating this process.