Real Estate Rookie (BiggerPockets)
Episode: Why Landlord Insurance Premiums Are Skyrocketing in 2026 (And How to Stop It)
Date: January 7, 2026
Hosts: Ashley Kehr (A) & Tony J. Robinson (B)
Guest: Darren Nix (C), CEO of Steadily
Episode Overview
In this episode, Ashley and Tony delve into the skyrocketing landlord insurance premiums facing real estate investors in 2026. With guest Darren Nix, CEO of Steadily, they break down the driving factors behind these costs, what investors — especially rookies — can do to protect themselves, and how smart insurance choices can make or break a property’s viability. The discussion covers everything from climate-driven risks, regulatory shifts, and insurance market exits to nuts-and-bolts advice for underwriting deals, avoiding costly mistakes, and optimizing your coverage. The tone is supportive and practical, aimed at newcomers looking to build a resilient rental portfolio in an uncertain environment.
Key Discussion Points & Insights
1. Why Are Insurance Premiums Rising So Fast?
- Primary Cause: Hail Storms and Claims Behavior
- "One word. Hail storms. So over the last 10 years, the frequency of hail storms has increased across the US and the rate at which folks are filing roof claims has increased even faster than the number of storms." (C, 01:00)
- 80% of premium increases are attributed to increased claims (many driven by aggressive roofing contractors encouraging claims), not just actual weather changes.
- Social media and aggressive repair sales tactics have led to more claims: "There's no such thing as a free lunch. So if the number of roofs being replaced is going up, then insurance premiums are going up too..." (C, 01:41)
- Secondary Factors: Small Increase in Actual Weather Risk & Inflation
- Only about 20% of the increase is due to an actual uptick in severe weather.
- Inflation in labor and materials compounds the problem, especially in high-loss years: "The price of insurance historically has tracked almost exact to the price of inflation..." (C, 07:00)
2. How Can Rookie Landlords Respond?
- Minimize Claims for Long-Term Savings
- Avoid making small claims; higher deductibles can yield better rates over time.
- "For every dollar of claim payout that an insurance company makes, they have to collect about $1.40 in premium... So, for us as investors, the single thing that we can do to reduce our cost of insurance is just to buy less of it." (C, 03:06)
- Build reserves so you can handle minor repairs yourself, seeking coverage only for larger, catastrophic events.
- Insurance Underwriting and Shopping Tips
- Use calculators for initial ballparks (+/- 25%), then get real quotes for serious deals.
- Property age, roof condition, and vacancy/recent rehab status can be major cost drivers. (C, 07:58)
3. When a Market Becomes ‘Uninsurable’
- Regulatory & Loss Environment
- Two causes: prices become unaffordable; or, more commonly, regulation restricts rate increases, causing insurers to leave.
- "In California... the regulatory environment is set up in such a way that there are very strict controls on how much insurance companies can charge... So most of the admitted insurance companies in California, especially those that were riding in wildfire areas, have lost so much money... their response was to pull out." (C, 04:39)
- Identifying At-Risk Markets
- States like AZ, IN, IL are stable; CA, FL, TX, and WA show more volatility and insurer exits. (C, 09:24)
4. Homeowner’s vs. Landlord Insurance: Common Rookie Pitfalls
- Coverage Must Match Occupancy and Use
- Don't "let insurance ride" after moving out and renting; a homeowner policy may deny claims when tenants are involved or if the property is vacant. (C, 12:18)
- Use tools like ChatGPT to quickly review policy language for gaps, especially on vacancy coverage.
5. Anatomy of an Insurance Policy Quote (What Matters Most)
- Four Key Elements to Watch:
- Replacement Cost Methodology (Replacement Cost vs. Actual Cash Value/ACV)
- "I realized two things. One, I didn't actually want literally the cheapest policy. I wanted the most affordable policy that would get me a replacement cost." (C, 15:54)
- Dwelling Limit
- Deductible (All Perils)
- Liability Limit
- Underinsuring liability can be financially fatal: "We've had multiple customers that unfortunately have had homicides... those are lawsuits that are going to be 5 to 30 million dollars... wishing that they had a million or even an umbrella..." (C, 17:23)
- Replacement Cost Methodology (Replacement Cost vs. Actual Cash Value/ACV)
6. Optional & Overlooked Coverages
- Short-Term Rentals (STRs):
- Conventional landlord policies assume low/no contents; furnished STRs need much higher contents coverage.
- "If you have an STR... what would it cost me to get it habitable again? And that's the amount of contents coverage that you need. And it's very often three times more than people initially think." (C, 21:03)
- Consider explicit coverage for guest-caused damage and loss of income.
- Liability
- Upping from standard $300K–$500K to $1M+ (or umbrella) is wise for major emergencies.
7. Red Flags Before Buying a Property (Insurance Perspective)
- Major Red Flag: Knob and tube wiring (harder and costlier to insure).
- Situational Risks:
- Row houses/townhouses = fire spread risk = higher premiums.
- Homes pre-1974 or especially pre-WWII = code and risk issues = higher costs.
- Unique structures (converted barns/churches) = fewer carrier options, higher cost.
- "The cheapest properties to insure are going to be the most boring properties." (C, 24:45)
8. Best & Worst Markets for Insurance Costs
- Low-Premium, Lower-Risk States: Arizona, Nevada, Indiana, Ohio, inland Pennsylvania.
- High-Premium or Volatile States: Florida, California (esp. wildfires), Texas, Washington, Northeast (higher values, some weather risk). (C, 25:32)
9. The Future of Landlord Insurance
- Trend Toward More Automation
- Quoting will become faster and easier (minutes, not days), but property-specific nuances keep it from being as instant as auto insurance. (C, 29:51)
10. Smart Use of Deductibles and Coverage as You Grow
- Strategy: Start with Lower Deductibles, Shift Up Over Time
- "As I built up my portfolio, I instead started thinking, man, for every dollar of coverage that I get, I'm paying a buck forty. So I can actually increase my rate of return if I just buy less insurance, but I have to be able to handle the shocks." (C, 31:55)
- For rookies: low deductibles offer peace of mind; experienced landlords should use high deductibles for premium savings, focusing insurance on large, rare events.
Notable Quotes & Memorable Moments
-
On Claims-Driven Pricing:
"If you, over your lifetime, get paid, let's say, $100,000 in insurance, you've probably paid $140,000 for those claims."
— Darren Nix, 03:00 -
On Regulatory Exits:
"There's no such thing as bad risk. There's just bad rates."
— Darren Nix, 04:40 -
On Shopping for Cheap Insurance:
"I want the cheapest policy you can get me. That's literally what I said... I noticed this term on it that said ACV... if you have a 20 year old roof, the actual cash value of that $30,000 roof is like 2,000 bucks."
— Darren Nix, 15:34 -
On Lawsuits & Liability:
"You might be in the right and you might ultimately win that lawsuit, but you'll spend half a million dollars... defending it."
— Darren Nix, 19:11 -
On STR Contents Coverage:
"It's very often three times more than people initially think... My laptop, the other things, like 20 grand. And she's like, no, it's, it's like 150K."
— Darren Nix, 21:38 -
On Picking Markets:
"The cheapest properties to insure are going to be the most boring properties."
— Darren Nix, 24:45 -
On Growing into Higher Deductibles:
"What you would hopefully be building toward as you build up a bankroll is a world where you can self insure the small stuff and only use insurance for the big stuff..."
— Darren Nix, 32:44
Timestamps for Important Segments
- 01:00 — Why premiums are skyrocketing: Hail, claims, social behavior
- 03:00 — Real cost of insurance: Why lower claims mean lower long-term spend
- 04:39–07:44 — State exits, uninsurable markets, inflation’s effects
- 07:58–09:01 — Underwriting deals: Estimating insurance costs
- 12:18–14:54 — Homeowner vs. landlord insurance: Common rookie mistakes
- 15:34–18:31 — Key policy features: ACV vs. replacement cost, deductibles, liability
- 20:47–22:25 — STR contents coverage and overlooked risks
- 23:20–25:32 — Red flags when buying: Wiring, property type, age
- 25:46–26:45 — Best/worst states for insurability
- 29:51–30:45 — The future: Automation in landlord insurance
- 31:15–34:03 — Deductibles explained and evolving your insurance approach
Actionable Takeaways for Rookie Investors
- Don’t claim small repairs — save insurance for major events to keep your premiums down.
- Match your policy type to property use and occupancy — don’t ‘forget’ to update when shifting to rental.
- Choose replacement cost over ACV whenever affordable — the cheapest policy usually isn’t the best.
- Increase coverage for liability — the major risks are rare, but potentially catastrophic.
- For STRs, triple-check your contents and guest damage coverage needs.
- As you gain experience and resources, raise your deductibles to lower your ongoing costs.
- Investigate state-level insurance trends and watch for signals of insurer exits in your market.
For more information or to get a tailored landlord insurance quote, visit steadily.com.
(Prepared for listeners who want a comprehensive recap, decision-making frameworks, and direct quotes. The summary maintains the podcast’s accessible, pragmatic tone and highlights key learning moments for rookie real estate investors.)