Rental property owners in Delaware face a specific set of risks: coastal storm exposure along the shore, older housing stock in Wilmington, and a tenant-friendly legal framework that creates real liability exposure. A standard homeowners policy does not cover rental activity, which means investors need a separate landlord policy before placing a tenant in any property.
This guide covers what Delaware landlord insurance includes, what it costs, what state law requires of landlords, and how to avoid the coverage gaps that generate the most claims.
What Landlord Insurance Covers
Landlord insurance (also called a dwelling fire policy or DP-3 policy) is designed for non-owner-occupied residential property. It differs from a homeowners policy in two meaningful ways: it excludes the tenant's personal property and includes loss-of-rent coverage as a standard or optional feature.
A typical Delaware landlord policy includes:
- Dwelling coverage: Pays to repair or rebuild the structure after a covered loss such as fire, lightning, windstorm, vandalism, or certain water damage events.
- Other structures coverage: Covers detached garages, fences, and similar structures on the property.
- Liability coverage: Pays legal defense costs and settlements if a tenant or visitor is injured on the property and holds the landlord responsible. Most policies start at $100,000; experienced investors typically carry $300,000 to $500,000, often supplemented by an umbrella policy.
- Loss of rental income: Reimburses lost rent while the property is uninhabitable due to a covered claim. Coverage typically applies for 12 months and is subject to the same deductible as the dwelling claim.
