Your Guide to Multi-Family Homeowners Insurance

WRITTEN BY: Mark Romero


If you’re the owner of a multi-family dwelling, it’s vital that you understand your options for insuring your property and that you know what’s covered under various policies. It’s also an excellent idea to educate your tenants regarding their insurance options so they know what’s covered by your insurance and what policies they might want to purchase on their own.

What Counts As A Multi-Family Dwelling?

A multi-family dwelling is any structure capable of housing more than one occupant in their unit. Each living unit would have its kitchen, bathroom, and living spaces, with walls dividing the units to keep them private and separate. 

Some examples of a multi-family dwelling are: 

  • a house with separate upstairs and downstairs flats
  • a duplex with two units side by side
  • a four-plex, meaning a home with four separate apartments. 

While the term can also apply to condos, townhouses, and standard apartment complexes, this guide applies to stand-alone houses with multiple interior units.

Owner-Occupied Multi-Family Homeowners Insurance

When shopping for multi-family dwelling insurance, the first question is if the home is owner-occupied. 

Do you, the owner, live in one of the units of your property? 

If the answer is yes, you can typically purchase standard homeowners insurance to cover the cost of repairing damages to the structure and its surrounding exterior features. 

Note that standard homeowners insurance covers the exterior and framework of an entire structure, so renting out a unit in the house shouldn’t affect that policy.

For example, if the home suffers roof damage during a storm, your homeowners insurance should cover repairs even if that damage is located over the rented unit.

Non-Owner Occupied Multi-Family Homeowners Insurance

If you, the owner, do not live in the multi-family dwelling, you would typically need a Dwelling and Fire policy, or DP.

A DP policy covers the structure itself in the event of a fire or other disaster and is meant for multi-family dwellings used solely for renting and not for your occupancy.

To ensure you opt for the best DP policy for your unit, note some details about this type of coverage:

Covering Lost Rent

A DP policy might also provide coverage for “loss of use,” or the home’s fair rental value, reimbursing you for the cost of lost rent while the house is being repaired. If you rely on the rental income from your multi-family dwelling, ask about this coverage and ensure it’s adequate for your needs.

Re-homing Your Tenants

Loss of use coverage might also include a small amount to help tenants relocate during repairs. This can also be an excellent coverage option to consider if you want to ensure your tenants decide to return to your property after it’s repaired! They may appreciate every courtesy you extend to them during that time. 

Covering Additional Structures

It’s vital to note if outside structures and features need additional coverage. These structures and features might include a garage, a swing set for the children, or a wood deck. Ensure you have proper coverage for these items and the house itself.

Liability Insurance

Liability insurance reimburses the cost of medical bills for someone injured on your property, as well as property damage for which you’re responsible. For example, if a renter slips on ice outside the property, you might be liable for their medical bills. If a tree falls on their car, you might also be liable for the cost of repairing their vehicle.

A property owner must understand that these costs aren’t covered in standard homeowners or DP policies. As even a minor accident can be very costly, it’s good to ensure you have adequate liability insurance for your multi-family dwelling.

Personal Property Insurance

Homeowners or DP insurance policies don’t protect personal belongings inside a unit, including kitchen appliances, ceiling fans, and light fixtures.

If you don’t live in the house and don’t provide furniture for tenants, you might not think you need personal property insurance; however, it’s good to consider some coverage for appliances and other such costly items.

Also, you might help your tenants understand that their belongings aren’t covered under your property insurance and suggest they carry a renter’s insurance policy.

You then won’t run into misunderstandings about your financial responsibility if your furniture, clothes, and so on are damaged in a fire, flood, or another disaster.

What Impacts Your Multi-Family Homeowners Insurance Costs

If you’re a property owner, no doubt you want to do everything possible to lower your insurance costs. Note some details that often affect insurance premiums so you can consider making adjustments where needed:

Old wiring

Old wiring is more likely to become bare and frayed and put your building at risk for an electrical fire. Updating the home’s wiring might help reduce your fire insurance costs.


A firewall between units helps to contain a fire that starts in one location, reducing fire damage to the house overall. Note the construction of the wall or walls between units and consider upgrading to an actual firewall for the safety of your tenants and to lower your insurance costs.


Owner-occupied multi-family dwellings are often maintained more readily than owners who live offsite. If possible, consider moving into one of the home’s units to lower your insurance costs and keep your property in the best possible condition overall.

Smoke and CO detectors

Most areas require smoke alarms in homes and rental properties, but you might lower your insurance costs by adding more smoke detectors and installing carbon monoxide detectors. You might also ask your insurance agent if providing tenants with fire extinguishers could lower your insurance costs.

Exterior maintenance

Ask your insurance agent if you might lower your liability policy costs by hiring an outside company to remove snow and ice or otherwise maintain the property’s grounds. A professional maintenance company might be more skilled at keeping a property safe for tenants, and the reduction in your insurance costs can offset their fees

How to Get Multi-Family Homeowners Insurance

Insuring a multi-family dwelling can be tricky, but ensuring you have the right coverage in case something happens is important. We hope this article has helped you understand your options and what’s covered under each type of policy. If you’re ready to get quotes for your property, head to our rates form, and we’ll help you find the best rates available.