Landlord Insurance in Connecticut: Costs, Requirements & Best Providers

What sets the price in Connecticut

Connecticut’s benchmark of $2,135 is about 14% under the national average. A landlord (DP-3) policy on the same $400,000 house would typically run about $2,460 to $2,670. The state’s housing is old, many small landlords own two-to-four family houses in Hartford, New Haven, Bridgeport and Waterbury, and winter is hard on both. Two local problems change the math more than the benchmark does: the shoreline and the foundations.

The shoreline: hurricane deductibles and flood

Irene in 2011 and Sandy in 2012 flooded shoreline towns from Greenwich to Old Saybrook. Policies along the coast commonly carry a hurricane deductible set as a percentage of the dwelling limit, so a named storm can cost you thousands before coverage starts. Read that line before you compare premiums.

Storm surge is flood, and flood is excluded from landlord policies. Lenders require flood insurance in FEMA special flood hazard areas, through the National Flood Insurance Program or a private insurer. If a shoreline rental has a basement, ask what the flood policy covers below grade, since flood policies limit basement contents and finishes.

When private insurers won’t write a property, the Connecticut FAIR Plan is the backstop, with narrower coverage.

Crumbling foundations in the northeast

Concrete containing the mineral pyrrhotite has caused foundations to crack and crumble in thousands of homes, concentrated in Tolland, Windham and eastern Hartford counties. Landlord policies treat this as gradual deterioration and won’t pay. The Connecticut Foundation Solutions Indemnity Company, a state-created captive, helps fund repairs for eligible owners, but don’t assume a rental qualifies.

If you’re buying a rental in that area, ask for a core test of the foundation. A repair means lifting the house and pouring a new foundation, which costs far more than any insurance premium.

Nor’easters, ice dams and old buildings

Winter claims dominate inland. Ice dams push water under shingles and into walls, pipes freeze in unheated stairwells, and heavy snow brings down limbs. Underwriters will ask about the age of the roof, the electrical panel, heating type and any oil tank. An old fuse box or knob-and-tube wiring can mean a decline or a required upgrade.

Ways to lower a Connecticut premium

• Upgrade the electrical and heating before you shop, and put the dates on the application.
• Install ice and water shield at the eaves when you re-roof.
• Raise the all-other-perils deductible to $2,500 if you hold the reserve.
• Insure multiple buildings together through a portfolio policy such as Obie’s blanket coverage.
• Require renters insurance so tenant belongings and many tenant-caused claims don’t land on your policy.

Connecticut deposit and late-fee rules

Connecticut caps deposits at two months’ rent, or one month if the tenant is 62 or older. You must return the deposit with an itemized statement within 21 days after the tenancy ends or 15 days after getting a forwarding address, whichever is later, and pay interest at the rate the Banking Commissioner sets each year (Conn. Gen. Stat. § 47a-21). Violations can cost twice the amount. Late fees can’t start until rent is 9 days late and are capped at the lesser of $5 a day up to $50 or 5% of the late payment. With a capped deposit, a big repair bill after move-out often exceeds what you hold, and landlord policies cover sudden damage, not ordinary wear and tear, so keep a cash reserve for turnovers.