By the Lapera Insurance Team · Reviewed by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394)
You are running the numbers on a rental, or the first landlord renewal just landed, and every website gives you a different figure. Here is the honest version: nobody publishes an official Illinois average for landlord insurance. What we can show you is the data that does exist, what actually moves the price on a rental, and which parts of the cost are worth paying for.
There is no official Illinois average for landlord insurance. The Insurance Information Institute says landlord policies generally cost about 25% more than a standard homeowners policy, and the NAIC put the average Illinois homeowners premium at $1,343 in 2022. What you actually pay depends on the building, its age and systems, the number of units, the coverage form, your liability limit and your deductible. A quote on the real address is the only reliable number.
Cost questions about rental property are really two questions. The first is what a policy like yours tends to cost, which the public data can only partly answer. The second is what drives your number up or down, which is where you have real control. We take the data first, then the building, then your coverage choices, then the handful of things about you that carriers look at. If your rental is hard to place, we cover that too.
Is There an Average Cost for Landlord Insurance in Illinois?
TL;DR: No regulator publishes an Illinois landlord average, so the honest baseline is the state homeowners average plus the industry rule of thumb that landlord policies cost more.
If you have searched for a single Illinois landlord insurance number and come up empty, you did not miss it. It does not exist in the public data.
The closest thing is the NAIC's annual homeowners report, which includes a dwelling fire category. But the NAIC defines that category as one family, owner-occupied, non-seasonal buildings, and says its dwelling fire figures "are not directly comparable to the homeowners data" (NAIC homeowners insurance report, data for 2023, published July 2026). A tenant-occupied rental is exactly what that category leaves out.
Two figures are genuinely useful. The Insurance Information Institute says landlord policies "generally cost about 25 percent more than a standard homeowners policy" (III, coverage for renting out your home), a long-standing industry rule of thumb rather than a dated survey. And for a homeowners baseline, the NAIC put the average Illinois homeowners (HO-3) premium at $1,343 in 2022, against a U.S. average of $1,569 (NAIC data via III, 2022). Our guide to how much homeowners insurance costs in Illinois covers that baseline in more depth.
It is tempting to take the homeowners average and add 25%. We would not. The homeowners figure blends houses of every size, age and location across the state, and the 25% is a general rule of thumb, not an Illinois measurement. Stacking one rough number on another gives you a figure that looks precise and tells you nothing about your building.
Lapera Insurance Agency is a Farmers Insurance agency at 530 Barron Blvd in Grayslake, Illinois. Our team has served Illinois families since 1993, with over 40 years of combined experience, and we quote rental property every week, from a single inherited house to small multi-unit buildings. Every guide on this site is reviewed by a licensed Illinois agent before it publishes.
Why Does Landlord Insurance Cost More Than Homeowners Insurance?
TL;DR: A landlord policy carries risks a homeowners policy never does: people the carrier did not underwrite living in the building, your liability as an owner, and the rent you lose after a covered loss.
The III describes a landlord policy as covering physical damage to the structure, loss of rental income while the property cannot be rented during repairs, and liability if a tenant or guest is injured (III). Each of those is a cost the carrier is taking on that a homeowners policy does not.
- Tenant occupancy. The owner is not there to notice a slow leak or a failing water heater on a Tuesday. Small problems tend to get reported later, and turnover adds wear.
- Landlord liability. A tenant hurt on the stairs or a guest who slips on the walk can bring a claim against you as the owner responsible for the property. That is a different legal exposure from a guest at your own home.
- Loss of rents. A homeowner has no rent to lose. A landlord does, and replacing that income while the unit is repaired is a coverage the homeowners form simply does not include.
- Vacancy between tenants. Empty buildings are more exposed to vandalism and unnoticed water damage, which is why many policies restrict some losses once a property has been vacant beyond a stated period.
None of this means the premium is unreasonable. It means you are buying a different product. Our Illinois landlord insurance guide walks through what a DP-3 covers section by section.
What About the Building Changes the Price?
TL;DR: The building sets most of the price: its age and systems, how it is built, how many units it has, where it sits and how close it is to fire protection.
Rental property is a big part of Illinois housing. The Census Bureau's American Community Survey puts the Illinois owner-occupied rate at 67.1%, which means about a third of occupied homes in the state are rented, with a median gross rent of $1,274 a month (U.S. Census Bureau QuickFacts, ACS 2020-2024). Plenty of those rentals are older buildings, and older buildings are where carriers ask the most questions.
Age and systems
Year built matters less than what has been updated. Carriers want the years the electrical service, plumbing and heating were last replaced.
Roof age
Carriers ask when the roof was installed. An older roof can affect eligibility and the terms a carrier offers, so have the year ready.
Construction type
Masonry, frame and mixed construction are rated differently, and replacement cost has to reflect current labor and material prices.
Number of units
A single-family rental, a two-flat and a four-unit building are underwritten differently. In our experience, buildings with five or more units usually move to commercial programs.
Fire protection
Distance to a fire station and a hydrant feeds the protection class, one of the core rating factors on any dwelling policy.
Location and water
Address-level claim history, a below-grade unit and proximity to water all shape both price and which endorsements make sense.
Multi-unit buildings add their own layer: shared stairs, a common boiler, a garden unit that sits partly below the street. Our Chicago two-flat, three-flat and four-flat guide covers those details for city buildings.
Carriers can only rate what they know. If the panel was replaced in 2015 and the plumbing in 2019, a receipt or inspection report showing it helps the quote reflect the building you actually own, instead of a default assumption based on the year it was built.
How Do Your Coverage Choices Change the Premium?
TL;DR: Your coverage choices are the part of the price you control, and the goal is to spend where a loss would hurt most rather than strip the policy down to its minimum.
Two landlord quotes on the same building can look very different simply because they are not quoting the same coverage. Before comparing prices, compare these choices line by line.
| Choice | Lower-premium version | Stronger version | Our usual view |
|---|---|---|---|
| Policy form | DP-1: basic named perils, often actual cash value | DP-3: open perils, covered unless excluded | DP-3 for nearly every occupied rental |
| Loss settlement | Actual cash value (depreciation subtracted) | Replacement cost | Replacement cost wherever available |
| Loss of rents | Low limit, or none | Sized to a full year of real rent | Size it to your rent |
| Liability limit | The policy default | Higher limit, with an umbrella above it | Higher, plus umbrella |
| Water backup | Not added | Endorsement sized to the lower level | Add it on any building with a basement |
| Deductible | Higher deductible | Lower deductible | Only what your reserves can cover |
Loss of rents is the line to size carefully. It pays the rent you would have collected while the unit is uninhabitable after a covered loss, up to the limit or time period on the policy. Size it to what your units actually rent for, for as long as a serious repair could realistically take.
Both units rent for $1,274 a month, the Illinois median gross rent in the Census Bureau's 2020-2024 estimates. A cooking fire makes the upper unit uninhabitable for five months. That is $6,370 of rent that stops while the mortgage, taxes and utilities do not. With loss of rents sized to the real rent, that income is replaced after a covered loss. Without it, the owner carries the building out of pocket until the unit is re-let. Figures are illustrative, not a quote or a coverage determination.
On the deductible: raising it lowers the premium, and on a rental that can make sense. The catch is that the deductible comes out of your cash at the worst possible moment, often while the rent has also stopped. Pick a number you could pay tomorrow from reserves set aside for the property, not one that only works on paper.
Flood is a separate decision entirely, because standard landlord policies exclude it. Our Illinois flood insurance guide explains the options. For how each policy form works in detail, see the Illinois landlord insurance guide.
How Does Your Own Profile Affect a Landlord Rate?
TL;DR: Your claims history and, on a personal dwelling policy, your credit-based insurance score can affect the rate, within limits Illinois law sets.
Carriers look at the owner as well as the building. Prior property claims, on this rental or on others you own, are part of underwriting. A clean history helps, and if there was a past claim, telling us what happened and what was fixed afterward is better than letting the report speak for itself.
Credit is the other factor people ask about. Illinois's Use of Credit Information in Personal Insurance Act defines personal insurance to include non-commercial dwelling fire policies (215 ILCS 157/10). Section 20 of the Act then sets limits. In plain terms:
- Credit cannot be the only reason. An insurer may not deny, cancel or nonrenew a policy based solely on credit information.
- Renewal rates cannot rest on credit alone. The Act bars basing renewal rates solely on credit information.
- You can ask for a fresh look at renewal. On request at renewal, the insurer must re-underwrite and re-rate using current credit information, with limited exceptions, such as when you are already in the most favorable tier.
That summary comes from 215 ILCS 157/20, as reviewed in October 2026. It is general information, not legal advice, and each carrier's rating plan is filed separately.
What If Your Rental Is Hard to Insure?
TL;DR: If standard carriers decline a rental, specialty markets come next, and the Illinois FAIR Plan writes basic dwelling coverage on up to four units as a narrow last resort.
Some rentals get turned down: a building sitting vacant, an older property with original systems, a mobile home, or a place with recent claims. Being declined once is stressful, but it is not the end of the road. It usually means the risk belongs with a different market.
We work with Farmers and the Farmers family of carriers, plus additional markets. Within the Farmers family, Foremost writes specialty, vacant and mobile home rentals, which is often the next place we look when a standard dwelling policy is not a fit.
When the standard market truly says no, the Illinois FAIR Plan exists for "qualified applicants who have not been able to obtain property insurance," and it expects applicants to seek coverage in the standard market first (Illinois FAIR Plan). Its dwelling program is deliberately limited (FAIR Plan Producer Summary, revised September 2024):
- Eligible: owner-occupied or non-owner-occupied buildings of up to four units.
- Form: a basic DP-1 with limited named perils, settled at actual cash value.
- Limit: a maximum dwelling limit of $750,000.
- Not included: liability and theft coverage are not available under the dwelling program.
- Non-owner-occupied rentals: the property is surveyed before coverage is approved, and a minimum 20% premium deposit is required.
- Vacancy: vacant or unoccupied buildings are ineligible, except a vacant building with rehab work in progress.
Because the dwelling program does not include liability, a landlord on the FAIR Plan still needs a way to cover injuries to tenants and guests. If you end up there, talk to us about how to handle that piece, and keep working toward a standard policy once the building's issues are fixed. Our guide to the Illinois FAIR Plan and who qualifies has the full picture.
How Can You Lower the Cost Without Cutting Coverage?
TL;DR: The safe ways to bring a landlord premium down are bundling, a deductible your reserves can cover, documented updates and good management, not thinner liability or dropping water backup.
- Bundle where it fits. Carriers commonly offer multi-policy discounts when a rental sits alongside your home and auto, and several rentals on one schedule are easier to manage. Our guide to bundling home and auto in Illinois explains how it works.
- Tune the deductible, carefully. A higher deductible lowers the premium, but only choose one your property reserves can pay without strain.
- Document every system update. Electrical, plumbing, heating and roof replacement years all feed underwriting. Send them with the quote request.
- Screen tenants and require renters insurance. Good screening and a lease that requires tenants to carry their own coverage cut down on disputes and claims. Point tenants to our Illinois renters insurance guide.
- Review it every year. Rents change, units get updated, and the coverage that fit at purchase may not fit now.
Liability, loss of rents and water backup on a building with a basement. Those are the three coverages that turn a bad month into a recoverable one. If you own rental property, an umbrella above the landlord policy is usually the efficient way to carry real liability limits, which our Illinois personal umbrella guide explains.
What Do You Need for an Accurate Landlord Quote?
TL;DR: An accurate landlord quote needs the address, the units, the year built and update years, your current declarations page, the rents and lease terms, how the property is titled and your claims history.
The closer the information is to the real building, the closer the quote is to the real price. Here is what our team asks for:
- Address and building basics: year built, construction type and square footage.
- Units and occupancy: how many units, who lives there, and whether any are vacant now.
- Update years: roof, electrical, plumbing and heating.
- Your current declarations page, if the property is insured today, so we can match or improve the coverage rather than guess at it.
- Rents and lease type: monthly rent per unit and whether leases are long-term, so loss of rents is sized correctly.
- How the property is titled, so the policy is written to the right owner.
- Claims history on the property and any other rentals you own.
We place Illinois rentals with Farmers and the Farmers family of carriers, plus additional markets. Farmers lists property coverage, landlord liability, loss of rents, personal property and other structures among its landlord options, with availability varying by property (Farmers landlord insurance). Start on our landlord insurance page or request a quote. Our Grayslake office is open Monday through Friday, 8:30 AM to 5:00 PM Central, and we work with owners across Illinois by phone and email.
The Bottom Line
There is no official Illinois average for landlord insurance, and anyone quoting you one is guessing. What the data does say is that landlord policies generally cost more than homeowners policies, about 25% more by the III's rule of thumb, because they cover tenant occupancy, owner liability and lost rent. Beyond that, the price comes from the building, its systems and units, and the coverage you choose. The right move is to spend on liability, loss of rents and water backup, and to save through bundling, a sensible deductible and documented updates.
If you are pricing a rental before you buy, or your renewal jumped and nobody explained why, send us the address and your current declarations page. Our team will tell you what you have, what it would pay, and what a properly built landlord policy would cost on that building.
Related Questions
Is there an average cost for landlord insurance in Illinois?
No. No regulator publishes an Illinois average for landlord insurance, and the NAIC's dwelling fire category covers owner-occupied buildings only, which it says is not directly comparable to homeowners data. The useful reference points are the III's rule of thumb that landlord policies cost about 25% more than homeowners, and the NAIC's 2022 Illinois homeowners average of $1,343.
Is landlord insurance more expensive than homeowners insurance?
Generally, yes. The Insurance Information Institute says landlord policies generally cost about 25% more than a standard homeowners policy. The extra reflects risks a homeowners policy does not carry: tenant occupancy, the owner's liability to tenants and guests, and loss of rental income while a damaged unit is repaired. Your actual difference depends on the building and coverage.
Does a higher deductible make sense on a rental property?
It can, as long as you can pay it. A higher deductible lowers the premium, but on a rental the deductible often comes due while the rent has stopped too. Choose a deductible your property reserves could cover tomorrow, and never trade away liability, loss of rents or water backup to reach a lower price.
Can the Illinois FAIR Plan insure a rental property?
Yes, within limits. The FAIR Plan dwelling program accepts owner-occupied and non-owner-occupied buildings of up to four units on a basic DP-1 form at actual cash value, with a $750,000 maximum dwelling limit. It does not include liability or theft coverage, non-owner-occupied properties are surveyed first, and vacant buildings are ineligible unless rehab is in progress.
Can my credit affect my landlord insurance in Illinois?
It can on a personal dwelling policy, within limits. Illinois's credit law applies to non-commercial dwelling fire policies, and Section 20 says an insurer may not deny, cancel or nonrenew based solely on credit information or base renewal rates solely on it. At renewal you can ask the insurer to re-rate using current credit information, with limited exceptions.
Last reviewed October 2026 by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394). Figures verified against the sources linked above on that date.