Landlord Insurance 101: What It Covers, How Much It Costs, and Why You Need It

Thinking about renting out your property? That’s a great way to build extra income — but before you welcome tenants, it’s important to make sure your investment is protected.

Many property owners don’t realize that regular homeowners insurance doesn’t usually cover rental properties. That’s where landlord insurance comes in — it’s designed specifically for properties you lease out and protects you from risks that come with being a landlord.

In Guam, this type of coverage is especially important. With the island’s exposure to typhoons, earthquakes, and flooding, unexpected damage can happen more often than we’d like. Landlord insurance can help cover those costs — plus things like loss of rental income if the home becomes unlivable, tenant-caused damage, or liability if someone is injured on your property.

How Much Does Landlord Insurance Cost in Guam?

On average, landlord insurance in Guam can range anywhere from $800 to $3,000 per year, though costs can vary depending on your property and location.

Some of the biggest factors that influence your premium include:

• Location: Properties near the coast or in flood-prone areas may have higher premiums because of typhoon and storm surge risks.

• Property size and age: Larger or older homes may cost more to insure due to higher rebuilding costs and maintenance needs.

• Coverage type: Adding extra protection (like typhoon or flood insurance) will increase your premium but also strengthen your safety net.

• Claims history: If you’ve filed several claims in the past, your rates may be higher.

• Tenant type: Short-term rentals or frequent tenant changes can raise your risk profile and affect premiums.

  
  

Tips to Save on Landlord Insurance

While insurance can feel like a big expense, it’s worth every penny when something unexpected happens. Still, there are a few ways to keep your costs manageable:

1. Compare quotes: Get rates from both local and online insurers. Some companies specialize in island or coastal properties and might offer better terms.

2. Bundle policies: If you have multiple properties or vehicles, bundling them under the same insurer can earn you discounts.

3. Install safety features: Adding typhoon shutters, reinforced roofing, or a security system can make your property safer — and possibly reduce your premium.

4. Raise your deductible: Increasing your deductible can lower your monthly payment (just make sure you can cover that amount in an emergency).

5. Ask about loyalty or no-claim discounts: Some insurers reward long-term policyholders or those who rarely file claims.

   
   

What Landlord Insurance Typically Covers

Coverage varies from one policy to another, so it’s always best to read the fine print carefully. But generally, here’s what most landlord insurance plans in Guam include:

• Dwelling Coverage: Protects the structure of your rental property — walls, roof, and built-in features — from damage caused by covered perils like fire, wind, lightning, or typhoons. (Flooding is usually not included and must be added separately.)

• Detached Structures: Covers fences, carports, or sheds that aren’t physically connected to the main building.

• Personal Property: Covers your items that stay on the property, such as appliances or maintenance tools. (Your tenants’ belongings are not covered — they’ll need renter’s insurance.)

• Liability Protection: Helps pay for legal costs or damages if a tenant or guest gets injured on your property and takes legal action.

• Loss of Rental Income: Compensates you for lost rent if the property becomes uninhabitable due to a covered event, like a typhoon or fire.

  
  

What’s Not Covered by Landlord Insurance

Even with comprehensive protection, landlord insurance doesn’t cover everything. Common exclusions include:

• Flood damage: This is very important in Guam. Flood coverage must be purchased separately through a flood insurance policy.

• Tenant property: Your tenants’ belongings are not protected — they’ll need their own renter’s insurance.

• Appliance breakdowns: Normal wear and tear or equipment malfunctions (like a broken air conditioner) are not covered.

• Eviction costs: Legal fees related to removing a tenant are typically not included, though separate eviction insurance is available.

  
  

Landlord Insurance vs. Homeowner’s vs. Renter’s Insurance

It’s easy to confuse these three types of insurance, but each serves a different purpose:

• Homeowner’s insurance protects your primary residence — where you live.

• Renter’s insurance protects your tenant’s personal property and liability.

• Landlord insurance protects your rental property and your financial interests as the property owner.

If you own rental property in Guam, landlord insurance isn’t just a good idea — it’s a must. The island’s climate and location bring unique risks that standard homeowner’s insurance won’t cover.

Having the right policy means you’re prepared for anything — whether it’s a typhoon, tenant mishap, or unexpected repair. It may feel like just another expense now, but it could save you thousands later and keep your investment secure for years to come.