San Diego Landlord Insurance: Requirements & Best Policies
One of the most common questions we hear from property owners is: “My current insurance policy is fine, right?”
The honest answer? It depends entirely on who is sleeping in the house.
Insurance isn’t one-size-fits-all. A policy that perfectly protects a family in Poway is useless for an investor in Pacific Beach, and potentially dangerous for an Airbnb host in North Park. If you have the wrong “occupancy rating” on your policy, you aren’t just under-insured—you might be uninsured.
At Good Life Property Management, we have strict standards to protect your asset. This guide breaks down exactly what coverage you need, why we require “Additional Insured” status, and which carriers are actually writing policies in California right now.
Part 1: Which Policy Do You Actually Need?
Let’s start with the basics. Your insurance needs are dictated by two things: who sleeps there and what type of building it is.
Scenario 1: The "Classic" Single-Family Rental
The Situation: You own a detached home. You do not live there. You have signed a lease with a tenant for 6 months or longer. What You Need: Landlord Insurance (Dwelling Fire Policy / DP-3)
This is the gold standard for investment properties. Because you are not present to monitor the home daily, the risk profile changes.
- Structure Coverage: Protects the physical building (roof, walls, systems).
- Loss of Rent (Fair Rental Value): This is the “secret weapon” of landlord insurance. If a fire or flood forces your tenants out, this pays you the lost rental income while repairs are done. Without it, you are stuck paying the mortgage with zero income.
- Premises Liability: Protects you if a tenant (or their guest) sues you for an injury on the property.
The “Gotcha” to Avoid: Do not let your agent sell you a DP-1 policy to save money.
- DP-1 (Bad): Pays Actual Cash Value (ACV). If your 20-year-old roof burns down, they pay you the value of a used roof (depreciated). You pay the difference.
- DP-3 (Good): Pays Replacement Cost. They pay what it costs to put a brand new roof on today, regardless of how old the old one was. Always demand a DP-3.
Scenario 2: The Condo or Townhome Rental
The Situation: You own a unit in a building with an HOA. What You Need: Landlord Condo Policy (HO-6 equivalent)
Do not buy a standard DP-3 “Dwelling” policy for a condo; you will be over-insuring the exterior.
- “Walls-In” Coverage: Your HOA master policy likely covers the roof and studs (bare walls). Your individual policy must cover everything from the paint inward: cabinets, flooring, fixtures, and appliances.
- Loss Assessment Coverage: Critical for San Diego. If the HOA gets sued or suffers a massive loss (like a clubhouse fire) that exceeds their policy, they can issue a “special assessment” to all owners. This coverage pays your share of that bill.
Scenario 3: The "House Hacker" (Renting a Room)
The Situation: You still live in the home as your primary residence, but you rent out a spare bedroom, basement, or ADU on the same lot. What You Need: Homeowners Insurance (HO-3) + “Unit Rented to Others” Endorsement
Do NOT buy a Landlord Policy. Since you still live there, a Landlord Policy typically excludes your personal property (clothes, furniture, electronics).
- The Risk: A standard Homeowners policy might deny a claim if they discover a paying tenant caused the damage (e.g., the tenant started a kitchen fire).
- The Fix: Call your carrier and add a “Unit Rented to Others” endorsement. This extends liability coverage to the rented portion of your home while keeping your personal belongings protected.
Scenario 4: The Short-Term Rental (Airbnb/VRBO)
The Situation: You rent the property for stays of less than 30 days. What You Need: Commercial Short-Term Rental Insurance
Standard Landlord (DP-3) policies are designed for long-term residents. They often strictly exclude “business activity” like hospitality.
- The Risk: If a weekend guest trashes the house or gets injured, a standard landlord policy will likely deny the claim because the “occupancy” terms were violated.
- Note: Do not rely on the “Host Guarantee” from platforms like Airbnb. These are not regulated insurance policies and have significant loopholes. You need your own primary commercial coverage.
Scenario 5: The "Vacant" Property
The Situation: You are renovating to sell, or the home is between tenants for an extended period (usually 30+ days). What You Need: Vacant Home Insurance or Builder’s Risk
Most homeowners and landlord policies have a hidden “Vacancy Clause.”
- The Rule: If the home is unoccupied for more than 30 or 60 days, coverage for vandalism, glass breakage, and water damage is automatically suspended.
- Renovation vs. Sitting Empty:
- If you are just waiting for a tenant: Get a Vacant Home Policy.
- If you are doing major construction: Get a Builder’s Risk Policy (protects materials and liability during construction).
Part 2: Good Life’s Mandatory Insurance Requirements
To ensure every property we manage is fully protected, Good Life Property Management has strict standards. When setting up your policy, you must verify the following four items with your broker:
1. $500,000 Minimum Personal Liability
In California, a simple trip-and-fall lawsuit can easily exceed standard limits. If a judgment exceeds your insurance limit, the rest comes out of your pocket.
- Requirement: $500,000 minimum liability coverage.
- Note: If you are enrolled in our SureVestor program, you may lower this limit, as SureVestor covers you for up to $1 million.
2. Dwelling/Property Damage Coverage
Ensure your policy covers the structure itself. For condos, this is often an “HO-6” policy (walls-in coverage).
3. Good Life Listed as "Additional Insured"
You must list Good Life Property Management as an “Additional Insured” on your policy.
- Deadline: This must be completed within 7 days of management starting (or the property becoming vacant).
4. Why "Additional Insured" and not "Additional Interest"?
| Status | What it Means | Does it Protect You? |
|---|---|---|
| Additional Interest | The PM gets a letter if you cancel the policy. | NO. It provides zero coverage. |
| Additional Insured | Extends your liability coverage to the PM. | YES. It creates a unified defense. |
Why is “Additional Insured” status vital for you? If a tenant slips and falls, they will sue both of us.
- Without Additional Insured: Our insurance company has to defend us, and yours defends you. This creates an adversarial dynamic where our insurer may try to blame you to get out of paying.
- With Additional Insured: We are on the same team. Your policy covers both of us, providing a streamlined, cost-effective legal defense that protects your investment from infighting.
Part 3: Troubleshooting "Additional Insured" Issues
If you ask your agent to add Good Life as an “Additional Insured” and they say no, it is usually due to one of three specific reasons. Here is how to diagnose the problem and fix it.
Roadblock #1: The "Wrong Policy" Problem
The Agent Says: “We can’t add a property manager to this policy.” The Likely Cause: You are still holding a standard Homeowners (HO-3) policy.
- Why this fails: HO-3 policies are designed for owner-occupants. They cover personal liability for you and your family. Insurance carriers will not add a business (Good Life) to a personal policy because we are not your family members.
- The Fix: Tell your agent: “I need to rewrite this as a Landlord (DP-3) policy because the property is now tenant-occupied.” DP-3 policies are designed for investors and almost always have the specific endorsement code to add a property manager.
Roadblock #2: The "Budget Carrier" Problem
The Agent Says: “Our company simply doesn’t offer that endorsement.” The Likely Cause: You are with a direct-to-consumer carrier (like Geico, Lemonade, or Costco/Connect) that creates “cookie-cutter” policies to keep costs low.
- Why this fails: These carriers automate their underwriting and often do not have the mechanism to add third parties to liability coverage. They may offer to list us as “Additional Interest” (which is just a notification list), but they will refuse “Additional Insured” status.
- The Fix: You likely need to switch insurance providers. (See our Recommended Carriers list below for companies that definitely write this coverage in California).
Roadblock #3: The "Confusion" Problem
The Agent Says: “I added them as Additional Interest, that’s the same thing.” The Likely Cause: The agent is either inexperienced with rentals or trying to avoid paperwork.
- The Fix: politely push back. “Additional Interest only sends them a letter if I cancel. Additional Insured extends my liability coverage to them. My contract with Good Life requires the latter. Please check if your carrier offers a ‘Property Manager Endorsement’ specifically.”
The "SureVestor" Safety Net
If you love your current insurance carrier but they simply cannot accommodate this requirement, you do not necessarily have to switch.
What is SureVestor? Good Life Property Management is a member of the SureVestor program. This allows us to enroll your property in our own commercial Master Insurance Policy.
- How it works: Instead of fighting with your personal carrier, we add your property to our master policy which provides $1 Million in Liability Protection for both of us.
- The Benefit: This satisfies our contract requirement instantly.
- The Bonus: Because SureVestor covers the liability requirement, you are allowed to lower the liability limit on your own personal policy, potentially saving you money that offsets the cost of the program.
Part 4: Who Is Insuring California Right Now?
The California insurance market is tough. Many major carriers have paused new business. Based on our recent experience, here is who is writing policies and who isn’t.
Carriers Currently Writing New Policies (Green Light) ✅
- Steadily: Highly recommended. No problem adding Good Life as Additional Insured. Deductibles around $2,500.
- Obie: Taking new policies.
- Insurify: Will insure condos. Higher deductibles ($5k+).
- USAA: Excellent option, but only for current military/veterans.
- Lightspeed Insurance: Good for homes (fire/wind/vandalism only), but they do not insure condos.
Carriers with Restrictions (Yellow Light) ⚠️
- Amica: Will only insure your rental if they also insure your primary residence.
- Mercury: Requires bundling with auto insurance.
- AIS: They act as a broker for the California FAIR Plan. Use this if you are in a high-fire zone. (Note: FAIR Plan takes weeks to process).
- Honeycomb: Only sells commercial insurance (5+ units), not individual condos.
Carriers Not Writing / Difficult to Work With (Red Light) 🛑
- Liberty Mutual & Travelers: No new business in CA.
- American Family: Not insuring CA.
- Geico: No new CA business; will not add PM as Additional Insured.
- Lemonade: All online, but verified “poor reviews” regarding claims handling. We recommend avoiding.
Summary: Your Action Plan
Moving from a homeowner to a landlord is a major financial transition. Don’t let a paperwork error jeopardize your investment.
- Verify you have a DP-3 Policy (not Homeowners).
- Increase Liability to $500,000.
- List Good Life Property Management as “Additional Insured” (Not just “Interest”).
- Send us the Certificate within 7 days.
Need help? If you are hitting a wall with your current agent, reach out to one of the brokers listed above or ask your property manager about our SureVestor backup option.
Email Template: For Agents/Owners Pushing Back
If your insurance agent claims they “don’t do” Additional Insured, copy/paste this to explain why it benefits the owner:
“We require Good Life to be listed as an ‘Additional Insured’ to ensure we are on the same team. If an incident occurs and we are not listed, our insurance company would have to step in separately. This often leads to an adversarial dynamic where our insurer holds you (the owner) responsible.
Being an Additional Insured prevents this infighting. It creates a shared defense under your policy, protecting your investment from cross-liability. This typically comes at no extra cost to you. If your current carrier cannot provide this, we can recommend several who do.”
Frequently Asked Questions regarding Landlord Insurance
Can I keep my homeowners insurance if I rent out my house?
No. Standard homeowners policies (HO-3) are designed for owner-occupied properties and typically exclude coverage for tenant-occupied homes. If you file a claim while renting the property out, the carrier will likely deny it for “material misrepresentation.” You must switch to a Landlord Policy (DP-3).
What is the difference between "Additional Insured" and "Additional Interest"?
“Additional Interest” simply means the property manager receives a copy of the policy notices (like cancellation or renewal). “Additional Insured” extends your liability coverage to the property manager. Good Life requires “Additional Insured” status to ensure a unified legal defense if a tenant sues both the owner and the manager.
How much liability coverage do I need for a rental property in California?
Given California’s litigious environment, Good Life Property Management requires a minimum of $500,000 in personal liability coverage. If your insurance carrier caps coverage at $300,000, we recommend purchasing an Umbrella Policy to bridge the gap and protect your personal assets.
Does landlord insurance cover loss of rent?
Yes, but only if you have a DP-3 Policy. Most comprehensive landlord policies include “Fair Rental Value” or “Loss of Use” coverage, which reimburses you for lost rental income if the property becomes uninhabitable due to a covered claim (like a kitchen fire or severe storm damage).
What if my insurance carrier refuses to add Good Life as "Additional Insured"?
Some budget carriers (like Geico or Lemonade) do not offer this endorsement. If your carrier refuses, you have two options: switch to a landlord-friendly carrier (like Steadily or Obie) or enroll in Good Life’s SureVestor program, which provides the required liability compliance through our master policy.
Is landlord insurance more expensive than homeowners insurance?
Typically, landlord insurance costs 15% to 25% more than a standard homeowners policy because rental properties generally have a higher risk of liability and negligence claims. However, unlike homeowners insurance, landlord insurance premiums are generally 100% tax-deductible as a business expense.
Does my landlord policy cover Airbnb or short-term rentals?
Usually, no. Standard landlord policies are rated for long-term tenants (leases of 6+ months). “Business activity” like short-term hosting is often excluded. If you rent on Airbnb or VRBO, you need a specific Commercial Short-Term Rental Policy to ensure you are covered for guest liability and theft.
Steve Welty
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