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Landlord Insurance Tennessee
Last updated: May 30, 2025
"The first rule in investment is don't lose and the second rule in investment is don't forget the first rule." - Warren Buffett
Landlord insurance in Tennessee is a specialized insurance policy crafted for property owners leasing residential or commercial properties throughout the Volunteer State. Whether you rent out a single-family home in Nashville, manage apartments in Memphis, or own duplexes scattered across Knoxville, Chattanooga, or Clarksville, landlord insurance Tennessee is essential for protecting your real estate investment and managing risks unique to this state.
Unlike standard homeowners insurance, landlord insurance policies in Tennessee address the distinct exposures that come with renting, including tenant-related liabilities and weather hazards prevalent in Tennessee—think tornadoes, severe thunderstorms, and even occasional flooding.
Tennessee landlords have observed a steady uptick in insurance costs, affecting both their rental returns and monthly cash flow. According to our review of thousands of landlord insurance Tennessee policies, many property owners pay as much as 25% more than necessary due to limited access to expert agents or agencies unfamiliar with landlord insurance intricacies.
That’s where OfferMarket Insurance steps in—our platform is tailored to help Tennessee landlords quickly compare competitive quotes from over 40 insurance carriers. Our Tennessee-focused insurance professionals meticulously review each quote, ensuring you get premium protection at the most competitive rate—helping landlords across Tennessee save substantial amounts every year.
What Does Landlord Insurance in Tennessee Cover?
A robust landlord insurance policy in Tennessee typically safeguards you from:
🏠 Property damage due to fire, windstorms, hail, tornadoes, vandalism, and other covered events
⚖️ Liability claims if someone is injured on your Tennessee rental property
💸 Loss of rental income if your property becomes uninhabitable after a covered event
🌊 Flood insurance (purchased separately if your Tennessee rental lies in a flood-prone region)
Property Insurance
Tennessee landlords contend with weather threats ranging from spring tornadoes and summer hail to fire and acts of vandalism. The property insurance component of your landlord insurance Tennessee plan covers these risks—and may include temporary relocation expenses if tenants must be moved while repairs are made.
Tennessee’s property insurance options are typically divided into three main forms—Basic, Broad, and Special—each covering a distinct set of “perils” (risks):
Basic Form Perils
The most economical option for Tennessee landlords, this covers only the essential perils:
| 🔥 Fire |
|---|
| 🌩️ Lightning |
| 💥 Internal explosion |
Extended Coverage (EC) Perils
In Tennessee, landlords often refer to the “WHARVES” mnemonic to remember additional covered risks:
| 🌬️ Windstorm (including tornadoes—common in Middle and West Tennessee) |
|---|
| 🦹♂️ Civil commotion |
| 🔥 Smoke (from sudden damage, not fire) |
| 🌨️ Hail (frequent during Tennessee’s storm season) |
| ✈️ Aircraft impact |
| 🚗 Vehicle impact |
| 💥 Explosion |
| ❗ Riot |
For vandalism concerns, V&MM covers:
| V&MM Risks |
|---|
| 🏚️ Vandalism |
| 🦹♂️ Malicious mischief |
Broad Form Perils
Insurance agents in Tennessee use “BIG AFFECT” to remember even broader covered risks added to the previous forms:
| 🥷 Burglary damage |
|---|
| 🧊 Ice, sleet, snow (winter weather in East Tennessee) |
| 🪟 Glass breakage |
| 🚰 Accidental water or steam discharge |
| 🧊 Freezing objects (important in mountain areas) |
| ✈️ Falling objects |
| ⚡ Electrical current damage |
| 🏚️ Collapse |
| 💥 Tearing asunder |
Special Form Peril
The broadest landlord insurance in Tennessee is the “Special Form,” “open form,” or “DP-3” (favored for single-family rentals). This form protects against any direct physical loss unless explicitly excluded—so it’s important to review policy exclusions. Typical exclusions in Tennessee include:
| 🌊 Flooding (requires separate flood insurance in Tennessee’s floodplains) |
|---|
| 🌎 Earthquake (possible in West TN; usually added as an endorsement) |
| 🤡 Intentional acts of damage |
| ⚠️ Building code upgrades |
| 🔌 Off-premises power outage |
| 🇺🇸 Government seizure |
General Liability Insurance
General liability insurance in Tennessee shields landlords from injury or property damage claims made by tenants, guests, or contractors on your property. Policy limits usually range from $100,000 to $1,000,000 per claim.
For example, if a tenant slips on a wet porch in your Memphis rental and files suit, your landlord insurance Tennessee policy’s liability protection can help cover medical bills and legal fees.
Business Interruption Insurance (Loss of Rent)
Tennessee landlords risk losing rental income if tenants must vacate after property damage. Business interruption insurance, part of your landlord insurance Tennessee policy, helps recoup lost rents and maintain your cash flow while repairs are underway.
In Tennessee, this coverage is often cost-effective—generally about $1 for every $1,000 of annual rent.
Flood Insurance
Because much of Tennessee, especially cities along the Cumberland and Mississippi Rivers (such as Memphis, Clarksville, and Nashville), is prone to flooding, flood insurance is essential if your property lies within a FEMA-designated floodplain.
Most Tennessee lenders require up to $250,000 in flood insurance coverage. This is a separate policy, typically obtained via the National Flood Insurance Program (NFIP). You can check your property’s flood risk using FEMA’s online Flood Map Service.
Landlord Insurance for DSCR Loans in Tennessee
If you use a Debt Service Coverage Ratio (DSCR) loan to finance your Tennessee rental, you must meet your lender’s specific insurance requirements. Tennessee landlords are required to secure landlord insurance that satisfies lender guidelines to remain eligible for financing.
Insurance premiums directly affect your DSCR, so choosing affordable yet comprehensive landlord insurance Tennessee policies is key to protecting cash flow and maximizing loan qualification. Typical DSCR insurance needs include:
| DSCR Loan Insurance Requirement | Required? |
|---|---|
| Property Insurance | Yes |
| General Liability Insurance | Yes |
| Business Interruption Insurance | Yes |
| Mortgagee Clause | Yes |
| Lender as Additional Insured | Sometimes |
Our OfferMarket Insurance platform assists Tennessee landlords in meeting DSCR loan insurance demands—offering quotes that align with lender guidelines while keeping costs low.
How Much Does Landlord Insurance Cost in Tennessee?
The cost of landlord insurance in Tennessee is influenced by several important factors:
Location
Insurance companies assess risk based on your property’s location. For instance, rentals near the Mississippi or Cumberland Rivers in Memphis or Nashville may face higher premiums due to increased flood risk, compared to properties on higher ground in cities like Johnson City or Oak Ridge. Local construction and labor expenses also play a role in determining repair costs and, consequently, insurance rates.
Property Insurance Type
Tennessee landlords can select from Basic Form, Broad Form, and Special Form coverage. Special Form offers the broadest protection, typically recommended for rental properties—though it is the most expensive option.
| Property Insurance Type | Cost |
|---|---|
| Basic Form | $ |
| Basic + Extended Coverage | $$ |
| Broad Form | $$ |
| Special Form | $$$$ |
Dwelling Coverage Amount
The coverage limit you choose is the biggest driver of your Tennessee landlord insurance premium. Insuring for full replacement cost value (RCV) is strongly advised to avoid costly penalties, like coinsurance.
With rising material and construction costs throughout Tennessee, it’s smart to regularly review and adjust your coverage levels to reflect current rebuilding expenses.
| Dwelling Coverage Type | Cost |
|---|---|
| Actual Cash Value | $ |
| Functional Replacement Cost Value | $$ |
| Replacement Cost Value | $$$ |
Deductible
A higher deductible means lower annual premiums for Tennessee landlords. Many property owners choose deductibles of $5,000 or above, balancing potential out-of-pocket costs with premium savings.
| Deductible | Premium Cost |
|---|---|
| $1,000 | $$$$ |
| $2,500 | $$$$ |
| $5,000 | $$$ |
| $7,500 | $$ |
| $10,000 | $ |
Claim Frequency and Severity
Tennessee insurance carriers examine both your individual claim history and the claims history for your specific rental property. Frequent or severe claims—such as water damage during Tennessee’s rainy springs or wind damage from storms—can drive up your premiums or result in coverage limits.
Crime Score Impact
Local crime rates, especially in urban hubs like Memphis, Chattanooga, or Knoxville, have a direct impact on landlord insurance costs. High crime scores mean higher risks for theft, vandalism, and liability claims, causing insurers to raise rates or impose restrictions.
Security improvements—such as installing alarm systems or hiring on-site management—can help reduce your premiums, even if your property is in a higher-risk area.
Property Condition and Maintenance
Well-kept properties typically see lower insurance costs in Tennessee’s varied climate. Landlords are encouraged to upgrade plumbing and HVAC systems to prevent issues like pipe bursts during cold snaps and mold growth during humid summer months.
Older properties with outdated systems or significant structural concerns usually incur higher insurance premiums. Keeping a detailed log of all maintenance and upgrades can help secure more favorable policy terms.
How to Protect Your Rental Property in Tennessee
While landlord insurance Tennessee is an essential tool, proactive management strategies can further reduce your risk.
Tenant Screening
With Tennessee’s competitive rental markets—from the bustling neighborhoods of Nashville to college towns like Murfreesboro—careful tenant screening is a must. Conduct credit and background checks for every adult applicant, set minimum criteria for acceptable credit and rental history, and require higher deposits or co-signers when warranted.
Regular Maintenance
Tennessee’s unpredictable weather makes regular inspections a necessity. Check your rentals at least every quarter to identify small issues—like roof leaks, foundation cracks, or basement moisture—before they become costly repairs. Keep meticulous maintenance records, and share these with your insurer to potentially earn policy discounts.
Tenant Maintenance Education
Educate your Tennessee tenants on basic property care—such as changing air filters, knowing how to shut off the main water supply during emergencies, and letting faucets drip during freezing weather to prevent burst pipes.
DP-3 Insurance in Tennessee
DP-3 policies, commonly known as Special Form coverage, are considered the gold standard for rental property owners in Tennessee. These policies reimburse losses at replacement cost and provide protection against nearly all forms of physical damage except those specifically excluded in your policy.
What is Coinsurance?
Coinsurance provisions penalize Tennessee landlords who insure for less than a certain percentage (typically 80%) of their property’s replacement value. Underinsuring means you’ll pay a share of the claim, plus your deductible, out-of-pocket.
Coinsurance formula
(Insurance Carried ÷ Insurance Required) × Loss = Claim Payment – Deductible
If your Tennessee rental’s replacement cost is $250,000 but you only insure for $125,000, and you have a $5,000 deductible, a $50,000 claim would be paid as:
($125,000 ÷ $250,000) × $50,000 = $25,000 – $5,000 = $20,000 from the insurer.
You’d pay the remaining $30,000—showing the importance of full replacement coverage.
Landlord Insurance Markets in Tennessee
No matter where your property is located—from vibrant neighborhoods in Nashville to peaceful communities in East Tennessee or college towns like Knoxville—we connect you with landlord insurance options designed for your region.
Best Landlord Insurance in Tennessee
Tennessee landlords have many options to consider. We recommend securing:
Property insurance tailored for Tennessee’s weather and regional risks
General liability coverage for tenant and visitor injuries
Business interruption insurance to protect rental income
Flood insurance if your property is in a floodplain
Working with a knowledgeable agency—one familiar with landlord insurance Tennessee policies—ensures you get the broadest protection at the best price. Get your landlord insurance quote with OfferMarket Insurance today!
Landlord Insurance Guidelines for Tennessee DSCR Loans
The following table outlines best-practice guidelines for meeting DSCR loan insurance requirements in Tennessee:
Property Insurance
| Coverage Type | Requirement |
|---|---|
| Property Insurance | Mandatory, AM Best Rating A- VIII or higher, 1-year term |
| Limits | 80% of replacement cost or loan amount, whichever is higher |
| Deductible | $5,000 |
| Policy Type | Special Form (Dwelling Fire or Commercial Property) |
| Cancellation Notice | 30 days |
| Lender’s Designation | Mortgagee |
General Liability Insurance
| Requirement | Yes |
|---|---|
| AM Best Rating | A- VIII or higher |
| Limits | $500,000 per occurrence, $1,000,000 aggregate |
| Deductible | $1,000 |
| Coverage | Occurrence basis |
| Cancellation Notice | 30 days |
| Lender’s Designation | Additional Insured |
Business Interruption Insurance
| Business Interruption Insurance | |
|---|---|
| Requirement | Yes |
| AM Best Rating | A- VIII or higher |
| Limits | One year of gross rental revenue |
| Cancellation Notice | 30 days |
| Lender’s Designation | Mortgagee |
Flood Insurance
| Flood Insurance | |
|---|---|
| Requirement | Yes, if in flood zone |
| AM Best Rating | A- VIII or higher |
| Limits | $250,000 or loan balance, whichever is greater |
| Cancellation Notice | 30 days |
| Lender’s Designation | Mortgagee |
Additional Details for Tennessee Landlord Insurance
| Detail | Information |
|---|---|
| Mortgagee Clause | OfferMarket Capital LLC ISAOA/ATIMA 627 S Hanover St Baltimore, MD 21230 |
| Condos and PUDs in Tennessee | Blanket policies allowed if each unit is covered. Associations must maintain all-risk coverage for common areas and equipment at full replacement cost. |
| Instructions | Use ACORD forms for compliance. Submit insurance certificates, invoices, or paid receipts at least 24 hours before closing. Final policy documents must be submitted within 60 days of closing. Notify carriers if the property becomes vacant and secure a vacancy permit if needed. |
Frequently Asked Questions About Landlord Insurance in Tennessee
How does OfferMarket Insurance work for Tennessee landlords?
OfferMarket Insurance is a platform tailored to the needs of Tennessee rental property owners. We compare quotes from leading carriers, ensuring policies align with your preferences and lender requirements. Our specialists review every offer so you secure the best coverage at the best price.
Do I need a Builders Risk Policy in Tennessee?
Builders Risk insurance isn’t part of standard landlord insurance Tennessee policies. You’ll need it if you’re renovating or constructing a rental property, as it covers your building and materials during the project phase.
Can I use Functional Replacement Cost instead of Replacement Cost Value for my Tennessee rental?
It depends on your lender’s criteria in Tennessee. Many lenders accept Functional Replacement Cost, but some require Replacement Cost Value, based on your property’s age and appraisal.
Why does my Tennessee lender need to be an Additional Insured?
Some DSCR lenders require this. Listing your lender as an Additional Insured extends liability protection to them, while the Mortgagee Clause addresses property rights. Understanding these ensures your Tennessee policy is fully compliant.
Can I use my own insurance agent for landlord insurance in Tennessee?
Yes—if your agent can provide landlord insurance Tennessee policies and is familiar with specific coverage needs. Agents who only handle personal lines may not know landlord insurance requirements in Tennessee, leading to costly delays.
Can I pay for landlord insurance on the HUD-1 or ALTA settlement statement in Tennessee?
DSCR loans typically require premiums to be paid at closing—either via the HUD-1/ALTA statement or directly to your insurance agent before settlement.
Can I escrow my landlord insurance premium in Tennessee?
Many institutional lenders in Tennessee require your insurance premiums to be escrowed as part of your monthly mortgage payments to ensure continuous coverage.
Can I get a refund if I cancel my Tennessee landlord insurance policy?
Yes—Tennessee insurers must refund unearned premiums on a prorated basis. Always secure replacement coverage before canceling to prevent coverage gaps.
What is an AM Best Rating?
AM Best evaluates insurance company financial strength. In Tennessee, only choose carriers rated A- VIII or higher for landlord insurance, ensuring reliable claims support.
What is Builders Risk Insurance in Tennessee?
Builders Risk insurance covers properties and materials during new construction or renovation—protecting against theft, wind, fire, and vandalism until completion or occupancy.
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