Landlord Insurance in Huntsville: What You Should Know

Huntsville’s population grew 16% from 2020 to 2025, making it one of the fastest-growing cities in the U.S. For landlords, that growth means high demand, low vacancy rates, and rising property values. Still, like any other area, the city has its risks. Between tornadoes, floods, hailstorms, and the occasional ice storm, severe weather can cause thousands of dollars in damage in a matter of minutes. Heavy rains can flood nearby neighborhoods, while summer heat takes a toll on roofs, siding, and HVAC systems. Even great tenants can have accidents that result in costly repairs.

That’s why Huntsville landlord insurance is essential here. In this guide, we’ll break down everything from landlord insurance costs to the claims process to the differences between landlord insurance vs. homeowners insurance. By the end, you’ll feel confident enough picking a coverage type that keeps your investment safe for tenants and promising for your bottom line. 

What Is Landlord Insurance?

Landlord insurance in Huntsville is designed for single-family homes, apartment units, duplexes, or other properties that you rent out but don’t occupy yourself. These policies treat the rental property as a business asset, protecting both the structure itself and the income it generates. A Huntsville landlord insurance policy typically includes these three parts: 

1. Dwelling coverage: Pays to repair or rebuild your rental after a covered peril such as fire, windstorm, hail, or lightning.

2. Liability coverage: Handles legal defense costs, medical bills, and settlements if a tenant or guest is injured on the property and you’re found responsible.

3. Loss of rental income coverage: Replaces your lost rental income if the home becomes unlivable due to a covered event.

Most Huntsville landlord insurance policies exclude flood or earthquake damage, mold removal, eviction costs, tenant belongings, pest infestations, and damage caused intentionally or by neglect. Because Huntsville has risks that are unique to its location, many landlords choose to add endorsements to their standard policy, which are optional add-ons that offer extra coverage. Some of the most popular ones include: 

• Landlord belonging coverage: Protects appliances and furniture you provide in the unit for tenants to use (or tools you use to service the property, like a lawnmower)

• Equipment breakdown: Pays to repair or replace HVAC units, water heaters, and other major systems after sudden mechanical failures. 

• Vacancy protection: Extends coverage if the home is empty for more than the 30-90 days most Huntsville landlord insurance policies allow for before withdrawing protection 

• Flood insurance: Covers the cost of repairs if rising water from the Tennessee River or heavy rain causes damage

• Code upgrade coverage: Covers the extra cost of bringing an older home up to current building codes after repairs 

• Sewer and drain backup: Pays for cleanup and repairs if stormwater or sewage backs up into the property

• Crime-related protection: Helps with repairs and replacements if your property is vandalized or burglarized.

While there’s no law that requires you to have landlord insurance in Huntsville, your mortgage lender will often make it a requirement. At the end of the day, while it might seem like another unnecessary expense, it may be your only shield when something unexpected happens. For many, that peace of mind alone makes getting a policy well worth it. 

The Difference Between Landlord Insurance vs. Homeowners Insurance

One of the most common misunderstandings for new property owners is assuming that their homeowners policy will protect their rental in the same way it protects their home. In reality, the two types of coverage are meant for different scenarios, and finding that out after you need to file a claim can be an expensive lesson.

The main difference between landlord insurance vs. homeowners insurance is that landlord policies are concerned with the building itself, potential lost rental income, and medical and legal expenses if a tenant sues or is injured. Homeowners insurance, on the other hand, is written for an owner-occupied residence and assumes the risks are tied to your personal use of the home, not to managing tenants. It covers the home itself, the personal belongings inside, and your living expenses if damage forces you out for repairs. 

Because rentals usually come with higher tenant turnover, more wear and tear, and potential property damage, they’re considered more risky. As a result, landlord insurance costs 25% or more than homeowners insurance, on average. However, you can usually write off the cost of your policy as a business expense at tax time, helping to offset the price. 

Different Types of Rental Property Coverage

Landlord insurance policies in Huntsville are often referred to as DP1, DP2, and DP3. These are known as Dwelling Fire policies, and while they share the same basic purpose, they vary greatly in how much they cover and how claims are paid. Before choosing one, be sure it matches the needs of your property, your budget, and the risks in the area. 

DP1 Policies

A DP1, or Dwelling Fire Form 1 policy is the most limited kind of landlord insurance in Huntsville. It’s called a “named peril” plan because it only covers the specific risks listed in the policy, such as fire, lightning, wind, etc. If it’s not on the list, you’re out of luck. DP1 also pays based on actual cash value (ACV), which is the replacement cost minus depreciation. In other words, the older and more worn the damaged part of your property is, the less you’ll get to replace it. It’s the cheapest option, but it also leaves the most gaps open. Many landlords only choose a DP1 policy when they have an older, low-value home where they’re willing to take on more risk and repair potential damages out of their own pocket. 

DP2 Policies

A step up from DP1 Huntsville landlord insurance is the DP2 or Broad Form policy. It includes everything in DP1, plus a wider range of events like burst pipes, falling tree limbs, or certain kinds of structural collapse. The big upgrade here is that DP2 usually pays based on replacement cost, which means you’ll get enough to repair or replace what’s damaged without deductions for age or wear. For a lot of Huntsville landlords, this strikes the perfect balance between cost and peace of mind.

DP3 Policies

At the top of the tier is DP3 Huntsville landlord insurance, or Special Form coverage. This one is opposite from DP1 because it covers everything except what’s specifically excluded in writing. Floods and earthquakes are common exclusions, but otherwise you’re protected against just about any disaster that could hit your rental. DP3 also pays at replacement cost and is a favorite among landlords with higher-value properties or rentals in parts of Huntsville that see frequent severe weather.

Umbrella Insurance

Some property owners want even more protection than what landlord insurance in Huntsville can provide, which is why they choose to add umbrella insurance. These policies add an extra $1 million or more in liability coverage on top of the primary policy’s limits. In the event you’re sued or face major damage beyond what the insurer will pay, the umbrella policy will step in and cover the difference so that you’re not left paying from your own funds. These policies are relatively affordable, averaging just $383 per year. 

Limited Liability Company (LLC)

Other landlords choose to put their rental business into a Limited Liability Company (LLC), which places it into an entirely new legal category. If you have an LLC and a tenant sues you, your personal bank account, car, and home will be off-limits. It’s not a replacement for landlord insurance in Huntsville, but it does add extra coverage that ensures an issue at your rental property doesn’t start seeping into your personal life. 

Landlord Insurance Costs in Huntsville

On average, property owners pay about $1,094 per year for landlord insurance in Alabama. In Huntsville, that price can vary depending on the characteristics of your property. Here are the factors that usually play a part in determining your actual premium: 

• Location: If you own a home near the Tennessee River, your rate is likely to be higher due to increased flood risk. Properties in higher-crime areas may also have steeper premiums because of the increased risk of theft or vandalism.

• Age and condition: Many of Huntsville’s older homes, especially in historic districts, still have original plumbing, wiring, or roofing. These features can raise the risk of costly claims and lead to higher rates.

• Size and value of the home: Larger or more upscale properties carry higher replacement costs, which insurers factor into the premium.

• Extra coverage options: Endorsements like flood protection, equipment breakdown coverage, or sewer and drain backup add important protection but also increase the annual cost.

• Claims history: A property with multiple past claims is often considered higher risk, which can push rates up.

• Severe weather exposure: Huntsville’s location in Dixie Alley means a higher-than-average change of tornadoes and damaging hail and wind. 

When you combine these risks with the rising cost of construction and labor, it’s easy to see why many landlords end up paying high premiums for landlord insurance in Huntsville. 

How to File a Landlord Insurance Claim in Huntsville

If your rental property is damaged, taking the right steps quickly can make the claims process that much easier. Here’s how to handle it from start to finish:

1. Document the damage immediately: Take high-quality, timestamped pictures from both far away and up close. 

2. Prevent further damage: Wait on big repairs, but feel free to make quick fixes to ensure the damage doesn’t get worse. That might mean turning off the water, boarding up a smashed window, or throwing a tarp over the roof. 

3. Contact your insurance company: Big storms can cause Huntsville insurers to be busy for weeks. The sooner you can get your claim in, the closer you can move to the front of the line. 

4. Turn in all documentation: Whether it’s repair estimates, invoices, or official police and fire reports, send whatever the insurance company requests to keep your claim moving. 

5. Walk with the adjusters: Ensure you’re present for the inspection and point out any damage, both inside and out. Make sure to mention any hidden damage you suspect as well. 

6. Keep records: Save all emails, receipts, and notes until the claim has been processed. If there’s a dispute or you need to appeal the decision, you’ll be glad you have a paper trail to refer to. 

State law requires the insurance company to acknowledge your claim within 15 days. They then have 30 days to accept or deny the claim, which can be extended if they ask for more information. Unless your policy says differently, you’ll normally receive payment within 30 days.

Wrapping Up: The Value of Landlord Insurance in Huntsville

Owning a rental in Huntsville can be a great way to build wealth. The city’s growing fast, good tenants are easy to find, and property values are heading in the right direction. However, around here, a tornado or hailstorm isn’t a “what if,” but a “when.” That’s why having landlord insurance in Huntsville isn't optional. It’s what will pay to fix your roof after a hailstorm, cover lost rent if your tenants have to move out for repairs, and protect you if someone gets hurt on your property. Without it, you’re taking a serious gamble on your rental business. 

At Evernest, our local property management team helps Huntsville landlords protect what they’ve worked for. From finding responsible tenants to staying on top of preventative maintenance, we’re here to ensure your business stays profitable all year long. Contact us today, and we’ll take the stressors off your hands so you can focus on expanding your portfolio.