Is landlord insurance deductible?

The basic answer

Publication 527 says that in most cases, the expenses of renting your property, such as maintenance, insurance, taxes and interest, can be deducted from your rental income. Insurance appears by name in its list of the most common rental expenses. Fire and liability coverage you carry because you are a landlord is an ordinary cost of renting out the property, and you generally deduct rental expenses in the year you pay them, if you use the cash method.

That is the whole of the basic rule. Everything else is a question of which year the premium belongs to and whose insurance it really is.

Premiums paid more than a year ahead

If you pay an insurance premium for more than one year in advance, you cannot deduct the total premium in the year you pay it. For each year of coverage you deduct only the part of the premium that applies to that year. A three-year policy paid up front for $2,400 therefore gives $800 a year, not $2,400 in year one. The calculator above does this division and also prorates for months the property was actually rental.

A one-year policy is simpler. In the publication's main full-year example, a one-year fire insurance policy of $250 is deducted in full in that tax year along with $400 of repairs, $500 of real estate taxes and $200 of maintenance.

Converting a home to a rental

When you change your home or other property to rental use at some time other than the start of your tax year, you must divide yearly expenses such as taxes and insurance between rental and personal use. You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. The publication's example: you moved out in May and started renting on June 1, so you can deduct seven-twelfths of yearly expenses such as taxes and insurance as rental expenses. Insurance is treated differently from mortgage interest and real estate taxes here, because the personal-period interest and taxes can still go on Schedule A, while the personal-period insurance cannot be deducted at all.

Another example in the publication prorates the same way: a house rented for 11 months turns a $100 fire insurance premium into $100 x 11/12, or $92, of rental expense. Test it above with a $100 premium, one year of coverage and 11 months.

Renting only part of the property

If you rent a room, you divide expenses that cover the whole property between the rental and personal parts, using any reasonable method, with rooms and square footage the two most common. But you do not divide expenses that belong only to the rental part. The publication's example is premiums for liability insurance in connection with renting a room in your home: the entire cost is a rental expense. Homeowners coverage on the whole house is shared; coverage written specifically for the rental activity is not.

If you use a vacation home personally enough that it counts as a home, the insurance is part of the operating expenses on Worksheet 5-1 that you may deduct up to the remaining rental income. See how to split expenses with personal use.

What is not insurance you deduct

Fire insurance premiums paid at closing as part of buying a property are on the publication's list of settlement costs you cannot include in basis. That is a statement about basis, not a promise of a deduction, so keep the closing statement and treat the policy period going forward as the premium you allocate under the rules above. Amounts placed in escrow for future insurance and taxes are not part of basis either; the deduction comes when the premium is actually paid out of escrow.

Insurance you receive from a casualty or theft is a different topic. It reduces the basis of the property, and a gain can arise if the payment exceeds your adjusted basis. Publication 547 covers those losses. For repairs funded by a claim, see repair or improvement.

Sources

• IRS Publication 527, Residential Rental Property (2025): Rental Expenses (Types of Expenses, Insurance premiums paid in advance), Property Changed to Rental Use, Renting Part of Property. Read November 2, 2026.

Edition read: Publication 527 (2025), for use in preparing 2025 returns. Dollar limits and rates in this publication are for 2025; check the current publication and form instructions for your tax year. Where a figure is described as our arithmetic, it applies the publication’s rule to a made-up example. This page summarizes the publication and does not replace it.