Landlord Insurance in Illinois

Experts break down landlord insurance costs, coverage, companies and more in Illinois.

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Illinois is one of the most populated states in the US, with hundreds of colleges and universities. Both of these factors make it a prime place for profiting from rental properties. Any time you're letting someone else reside in a building you own, you need protection for your personal property and against any liabilities.

Landlord insurance is a combination of homeowners and business insurance that protects your investment. Working with a local independent insurance agent, you can find the best landlord insurance in Illinois that's tailored to meet your needs and protect against your unique risks. 

What Does Landlord Insurance Cover in Illinois?

Landlord insurance is important coverage for anyone who rents out their home or owns rental property like apartment complexes, townhomes, or condominiums. The three main events that landlord insurance protects you from are:

  • Property damage
  • Liability risks
  • Loss of income

Additional coverages are available based on the type of rental you have, your location, and the number of rentals you need insured.

What Landlord Insurance Policies Do I Need in Illinois?

In order to get comprehensive coverage, you'll want to start your landlord insurance package with the following coverages.

  • Property damage insurance: Covers the dwelling and the contents of your building if they're damaged by the tenant or an unexpected event like a fire, storm, theft, or vandalism. 
  • Liability insurance: Covers any third-party injuries or property damage that occur on your rental property. This can involve the tenant or a separate guest. Liability insurance pays for legal fees, court fees, settlement costs, medical bills, and more.
  • Loss of income insurance: If a storm causes catastrophic damage to your property and you need to evacuate your tenants, you cannot keep collecting rent from them while you're rebuilding. Loss of income insurance helps pay the lost income you'd experience from not being able to collect rent.

In addition to the above, you can speak to your independent agent about optional coverages, including:

  • Flood insurance:  If your rental property is located in a flood zone in Illinois, you'll want to consider purchasing a flood insurance policy. Damage from natural waters is excluded from property damage coverage.
  • Rent guarantee insurance: If you rely on your tenants' rent for income, rent guarantee coverage can help cover the costs if a tenant comes up short or doesn't pay their monthly rent.
  • Umbrella liability insurance: If you own a large rental property with a lot of tenants, an umbrella liability policy can protect you with limits that go above and beyond your standard liability limits. 
  • Workers' compensation: If you employ any staff members, you're required by law to provide workers' compensation for illnesses and injuries. 

Several additional coverages are available based on your needs. An agent can walk you through potential add-ons and policies that may benefit you.

Is Landlord Insurance Required in Illinois?

By law, landlord insurance is not required in Illinois, but it will be required by your mortgage lender if you have one. For many owners, renting property is a source of income and therefore should be treated as a business investment. As the landlord, you're responsible for the safety of your tenants and your personal property.

Even if you're only renting out your home, your homeowners insurance will not cover any property damage or liability claims if you are not occupying the home. 

If you are renting out your home one time for a very short period, such as a week or a month, you can probably get a rider on your homeowners policy for coverage. Any rental term beyond that, and you will need to purchase a landlord policy to receive coverage. 


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How Much Does Landlord Insurance Cost in Illinois?

Your insurance rates will depend on many factors such as the size of the property and how many properties you own. Every landlord's situation is different, but in general, you can expect to pay 15%-20% more than the cost of homeowners insurance. In Illinois, the average homeowners insurance is $1,056 annually.

Other factors that determine your rates include:

  • How much coverage you need
  • The type of coverage you purchase
  • Property size and number of units if applicable
  • Location and local crime rates
  • Potential severe weather risks
  • The age and condition of the property
  • Previous claims
  • Property amenities
  • Installed safety measures

Fortunately, there are multiple ways to save on your landlord insurance rates. You can typically save money by bundling your coverages, whether you qualify for group discounts, and through loyalty discounts. You can even shave some money off your premium by installing safety measures like sprinkler systems and burglar alarms.

What Are the Best Landlord Insurance Companies in Illinois?

A top-rated insurance company is one that has a great reputation for handling claims in a timely fashion, customer service, and affordability. Fortunately, an independent insurance agent has worked with insurance companies in your area and can help you find the best landlord insurance companies in Illinois that checks all the boxes. 

Agents have worked with these companies multiple times and built relationships with them, but they have your best interest in mind. This is how you know you're getting a trusted company that fits your needs. 

How Can an Independent Insurance Agent Help Me Find the Best Landlord Insurance in Illinois?

In the event of a natural disaster, intentional damage, or a tenant injury, you want the right protection. Finding the best landlord insurance in Illinois starts with an independent insurance agent who will work with you, free of charge.

Agents can answer your questions and help guide you in your selection process. They're not tied to a specific carrier so they're working for your best interest. They can help you determine your coverage needs, explain policy options, and compare quotes so you can make an informed decision. Work with a local agent today.

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