Navigating Landlord Insurance in Chicago, IL
Chicago is a city of renters, and about a third of all Illinois households are renters. Owning a rental property in Illinois can be rewarding, but it can also come with its own unique risks.
Landlord insurance, like homeowners insurance, could help you protect your investment, covering property damage, legal liability, and even lost rental income if your property becomes unlivable due to a covered event.
Think about it: what happens if a tenant accidentally sets off the sprinkler system in your South Loop condo? Or if a brutal lake-effect snowstorm caves in the roof of your two-flat in Logan Square?
Repairs like that could drain your wallet fast, which is why landlord insurance exists. While it’s not legally required in Chicago, most lenders won’t give you a mortgage without it.
So, what does landlord insurance in Chicago cover, how much does it cost, and what are some potential ways to save on premiums? Let’s answer those questions.
Is landlord insurance required in Chicago?
Chicago doesn’t legally require landlord insurance. You could technically rent out your property without it. But here’s why that’s risky: many lenders and property management companies may require proof of coverage before you can move forward.
Even if you own your building outright, skipping landlord insurance could be a gamble. Chicago can be tough on property: pipes freeze in winter, summer storms can bring basement flooding, and tenants could cause issues. Regular homeowners insurance won’t cover rental activities, so if you’re renting without a landlord policy, you may be at risk.
What does landlord insurance in Chicago typically cover?
Landlord insurance can help protect you in three areas: your property, your liability, and your rental income. Keep in mind that coverage and availability can vary depending on the underwriting carrier. Consult with a licensed insurance producer to determine your eligibility and explore available options.
That said, here’s what a typical landlord insurance policy could look like for Chicago property owners:
- Property damage: This part of landlord insurance helps cover the physical structure of your rental if fire, frozen pipes during a polar vortex, roof damage from hail or heavy lake-effect snow, and other covered events damage it.
- Liability protection: If a tenant or visitor gets hurt on your property and blames you, landlord liability coverage could help pay for medical bills and legal fees. Think: a tenant slips on an icy front step in Bronzeville or trips on loose carpeting in your West Town duplex.
- Lost rental income: If tenants can’t live in your property after a covered event (say, a fire in an Edgewater three-flat), landlord insurance could reimburse you for the rent you’re missing while repairs are made.
- Optional add-ons: Depending on which landlord insurance provider you choose, you may be able to add coverage for things like vandalism, building code upgrades, or even landlord contents (appliances or furnishings you provide).
Read more: How much landlord insurance do I need?
How much is landlord insurance in Chicago?
On average, landlord insurance in Illinois costs about $1,4621 per year. That’s the price of roughly 45 large deep dish Malnati Chicago Classic pizzas. However, you could pay more or less for landlord insurance in Chicago depending on the property and these factors.
- Weather risks: Chicago winters may mean frozen pipes and ice dams, while summer storms could bring flooding and hail. Insurance companies could price in that extreme weather risk.
- Urban density: More tenants and more foot traffic could increase the odds of liability claims (and potentially your premiums).
- Older housing stock: Many of Chicago’s iconic greystones and two-flats are a century old. That charm could come with higher repair and replacement costs.
Read more: How much landlord insurance costs.
Tips to lower your Chicago landlord insurance premium
Chicago landlords can’t control the weather or the age of the city’s housing stock, but you can control a few things that could directly affect your premium. Keep in mind that not every insurance company offers every discount, so it’s worth comparing multiple quotes before locking in coverage.
- Document your updates: Old plumbing and wiring can be commonly found in Chicago buildings. If you’ve invested in upgrades, make sure your insurance agency or company knows. Photos, receipts, and inspection reports could help demonstrate reduced risk, which may lower your rate with some insurers.
- Limit vacancy risk: Empty units could be magnets for frozen pipes and break-ins. Keeping your rental occupied (or showing you have security measures in place when it’s not) could work in your favor.
- Choose a realistic deductible: If you’re trying to keep monthly costs low, it could be tempting to go with the highest deductible. Consider whether the deductible is an amount you could comfortably afford to pay after a claim.
- Compare neighborhood-specific quotes: Landlord insurance costs in Lincoln Park could be different than those in Englewood, for example. Shopping around could be helpful in finding the insurance policy that works best for your needs.
- Ask about credits you might not expect: Some landlord insurance companies could offer discounts for things like installing smart thermostats, water sensors, and other preventative measures. Don’t be afraid to ask what you qualify for.
Still have questions?
Still wondering how landlord insurance in Chicago works? Explore these frequently asked questions.
How to estimate insurance on a Chicago rental property?
There are a few steps you can take to estimate how much landlord insurance will cost in Chicago. First, start with the Illinois average — about $1,4622 per year. Then, factor in your property’s size, age, location, and condition. For example, a newer condo in Streeterville could likely cost less to insure than a century-old two-flat in Humboldt Park. You won’t know until you get real landlord insurance quotes with your actual property details. Coverage and costs vary by carrier, so obtaining multiple quotes could help you get an accurate estimate.
What will you most likely need to insure as a Chicago landlord?
There are three things you’ll most likely need landlord insurance coverage for: the building itself, liability for injuries, and loss of rental income if the property becomes uninhabitable. Depending on what else you need, optional add-ons can cover appliances you provide, vandalism, or building code upgrades (which could be a big one in older Chicago homes).
How can I save money on my landlord insurance in Chicago?
You can save money on Chicago landlord insurance just like you would with any policy — shop multiple carriers, document updates you’ve made, and ask your insurance provider about discounts and credits for safety features. You could also save money in the long run by limiting vacancy and maintaining your building. Keep in mind that not every insurance company offers every discount, so it’s worth comparing multiple quotes before locking in coverage.
Why is landlord insurance more expensive?
The cost difference between landlord insurance and home insurance often comes down to differences in coverage. Landlord insurance generally covers risks that homeowners insurance typically doesn’t. Tenants can introduce liability, urban density increases exposure, and Chicago’s weather typically adds another layer of risk.
How much renters insurance should a landlord require in Chicago?
It’s fairly common for landlords require tenants to carry at least $100,000 in liability coverage, though requirements vary. This renters insurance protects the tenant, and by extension, it may also help protect you as the landlord.
Sources
1, 2 Information from Insurance.com.
Figures reflect averages from publicly available sources as of September 2025.
This article is for informational purposes only and was compiled from sources not affiliated with Hippo. While we believe this information to be reliable, we do not guarantee its accuracy or completeness. For any insurance-related decision, please consult your licensed insurance producer.
