What Landlords in Northwest Arkansas Need to Know About Landlord Insurance in 2025

Owning rental property in Northwest Arkansas can be incredibly profitable. With Bentonville’s booming economy, Rogers’ growing population, and Fayetteville’s steady rental demand, landlords are seeing strong returns.

But here’s what many property investors don’t realize:

Your standard homeowners insurance does NOT cover rental properties.

The moment you rent out a property, whether it’s a single-family home, duplex, or multi-unit building, your risk profile changes dramatically. And so do your insurance needs.

As an independent insurance agency serving landlords and property investors across Northwest Arkansas, OZK Insurance has helped hundreds of rental property owners protect their investments without overpaying or leaving dangerous coverage gaps.

This comprehensive guide covers:

• Why homeowners insurance doesn’t work for rentals
• What landlord insurance actually covers
• What endorsements NWA landlords need
• How to protect against tenant-related risks
• Real examples of landlord claims in Northwest Arkansas
• How to save money without sacrificing coverage
• Why independent agencies get landlords better rates

Let’s dive in.

Part 1: Why Homeowners Insurance Doesn’t Cover Rental Properties

Most landlords start with a simple question:

“Can’t I just keep my homeowners policy when I rent out the property?”

The answer is no, and here’s why:

1. Different Risk Profile

When you rent out a property, you’re no longer the only occupant. Tenants:

• May be less careful with the property
• May cause intentional damage
• May engage in illegal activities
• May sue you for injuries
• May have guests who get injured

Homeowners policies are designed for owner-occupied homes, not rental properties.

2. Homeowners Policies Exclude Business Activities

Renting property is a business activity. Most homeowners policies have explicit exclusions for business use.

What this means:
If you file a claim on a rental property covered by a homeowners policy, your insurer can:

• Deny the claim
• Cancel your policy
• Refuse to renew

3. Liability Exposure Is Much Higher

As a landlord, you face liability from:

• Tenant injuries
• Guest injuries
• Maintenance-related accidents
• Code violations
• Wrongful eviction claims
• Discrimination claims

Homeowners policies provide very limited liability coverage for these scenarios.

Part 2: What Landlord Insurance Covers

Landlord insurance (also called dwelling fire policy or rental property insurance) provides three core coverages:

1. Dwelling Coverage

Protects the physical structure of the rental property from:

• Fire
• Wind and hail
• Lightning
• Vandalism
• Theft
• Certain water damage events

How much you need:
Enough to rebuild the property at today’s construction costs.

NWA-specific note:
Construction costs in Northwest Arkansas have increased 18–25% since 2021. Make sure your coverage keeps pace.

2. Liability Coverage

Protects you if a tenant or guest is injured on the property and sues you.

What it covers:

• Medical expenses
• Legal defense costs
• Settlements and judgments

Minimum recommendation:
$500,000 per property

Better option:
$1,000,000 per property + umbrella policy

Real NWA example:
A Fayetteville landlord was sued when a tenant’s guest fell down poorly lit stairs. Medical bills and lawsuits totaled $600,000. Liability coverage paid the claim.

3. Loss of Rental Income Coverage

Pays for lost rent if the property becomes uninhabitable due to a covered loss.

What it covers:

• Lost rent during repairs
• Lost rent during rebuilding
• Typically covers 6–12 months

Real NWA example:
A Rogers rental home had a kitchen fire. Repairs took 4 months. Loss of rental income coverage paid $6,800 in lost rent.

  One major claim can wipe out months of rental income.OZK Insurance ensures your landlord policy includes loss of rental income coverage so you’re protected when tenants can’t occupy the property.

Part 3: Essential Endorsements for Northwest Arkansas Landlords

Standard landlord policies have gaps. Here are the endorsements every NWA landlord should consider:

1. Water Backup Coverage

Covers damage from water that backs up through:

• Sewer lines
• Drains
• Sump pumps

Why you need it in NWA:
Older neighborhoods in Rogers, Fayetteville, and Springdale have aging sewer systems prone to backups.

Cost:
$75–$200/year per property

Real example:
A Bentonville landlord had a sewer backup that caused $11,500 in damage. Water backup coverage paid the claim.

2. Ordinance or Law Coverage

Covers the cost to bring your property up to current building codes after a covered loss.

Why you need it:
If your rental property is damaged and local codes have changed since it was built, you may be required to:

• Upgrade electrical systems
• Install fire sprinklers
• Add ADA-compliant features
• Replace plumbing

Standard policies don’t cover these extra costs.

Recommendation:
Add 10–25% of your dwelling coverage.

3. Vandalism and Malicious Mischief Coverage

Covers intentional damage caused by tenants or others.

What it covers:

• Broken windows
• Damaged walls
• Destroyed appliances
• Graffiti

Important:
Some policies exclude vandalism by tenants. Make sure yours doesn’t.

4. Equipment Breakdown Coverage

Covers mechanical or electrical failure of:

• HVAC systems
• Water heaters
• Built-in appliances

Why it matters:
Standard policies only cover “sudden and accidental” damage, not wear and tear or mechanical failure.

Cost:
$50–$150/year per property

5. Flood Insurance

Flood damage is never covered by standard landlord policies.

Why NWA landlords need it:

• Properties near Beaver Lake, creeks, or low-lying areas are at risk
• New developments often have poor drainage
• FEMA flood maps are often outdated

Cost:
$500–$1,500/year depending on flood zone

Part 4: How to Protect Against Tenant-Related Risks

Tenants are your biggest risk as a landlord. Here’s how to protect yourself:

1. Require Renters Insurance

Make renters insurance a lease requirement.

Why:

• Protects tenants’ belongings (so they don’t sue you)
• Provides tenant liability coverage
• Reduces your risk

How to enforce it:

• Include it in the lease
• Require proof of coverage before move-in
• Require you be listed as “interested party” so you’re notified if the policy lapses

2. Screen Tenants Thoroughly

The best way to avoid claims is to avoid bad tenants.

What to check:

• Credit history
• Criminal background
• Eviction history
• Employment verification
• Previous landlord references

3. Conduct Regular Inspections

Regular inspections help you catch problems early.

Recommended frequency:

• Move-in inspection (with photos)
• Annual inspection
• Move-out inspection (with photos)

4. Maintain the Property

Most landlord liability claims stem from maintenance issues:

• Broken stairs
• Poor lighting
• Faulty wiring
• Leaky roofs
• Slippery surfaces

Best practice:
Address maintenance requests within 24-48 hours.

Part 5: Real Examples of Landlord Claims in Northwest Arkansas

Example 1: Kitchen Fire in Rogers

• Tenant left stove unattended
• Fire caused $42,000 in damage
• Property uninhabitable for 4 months
• Landlord insurance covered:
  • $42,000 in repairs
  • $6,800 in lost rent

Total payout: $48,800

Example 2: Slip-and-Fall in Fayetteville

• Tenant’s guest fell down poorly lit stairs
• Spinal injury requiring surgery
• Lawsuit settlement: $600,000
• Liability coverage: Fully covered

Without landlord insurance:
The landlord would have faced personal bankruptcy.

Example 3: Sewer Backup in Bentonville

• Aging sewer line backed up into rental home
• Damage to flooring, drywall, and personal property
• Total damage: $11,500
• Water backup endorsement: Fully covered

Without the endorsement:
The landlord would have paid out-of-pocket.

Example 4: Vandalism in Springdale

• Tenant was evicted for non-payment
• Before leaving, tenant destroyed:
  • Kitchen cabinets
  • Bathroom fixtures
  • Appliances
  • Windows
• Total damage: $18,200
• Vandalism coverage: Fully covered

  

Part 6: How to Save Money on Landlord Insurance

Here are the smartest ways NWA landlords reduce their premiums:

1. Insure Multiple Properties with One Carrier

Most carriers offer discounts when you insure multiple rental properties.

Typical discount:
10–20% per property

2. Increase Your Deductible

A higher deductible lowers your premium.

Example:

• $1,000 deductible: $1,250/year
• $2,500 deductible: $980/year

Savings:
$270/year

3. Install Safety Features

Many carriers offer discounts for:

• Security systems
• Fire/smoke alarms
• Deadbolt locks
• Fire extinguishers
• Carbon monoxide detectors

Typical discount:
5–15%

4. Maintain a Claims-Free History

Carriers reward landlords with no claims.

Typical discount:
5–10% after 3–5 years claims-free

5. Work with an Independent Agency

Independent agencies like OZK Insurance compare multiple carriers to find you the best rate.

Example:

• Carrier A: $1,450/year
• Carrier B: $1,120/year
• Carrier C: $1,280/year

Same coverage. $330/year savings.

Part 7: Why Independent Agencies Get Landlords Better Coverage

Here’s why working with OZK Insurance is smarter than going direct:

1. We Compare Multiple Carriers

We shop your coverage with multiple A-rated carriers to find the best combination of price and coverage.

2. We Understand NWA Rental Markets

We know which neighborhoods have higher risks, which properties are harder to insure, and which carriers offer the best rates for NWA landlords.

3. We Help During Claims

If you ever need to file a claim, we guide you through the process and advocate on your behalf.

4. We Manage Multiple Properties

If you own multiple rental properties, we coordinate all your policies and ensure you’re getting maximum discounts.

FAQ: Common Questions from NWA Landlords

“Do I need landlord insurance if I’m renting to family?”

Yes, accidents and damage can happen regardless of who the tenant is.

“What if I only rent out part of the year (like Airbnb)?”

You need short-term rental insurance, which is different from traditional landlord insurance. OZK Insurance can help.

“Does landlord insurance cover tenant belongings?”

No, that’s why you should require tenants to carry renters insurance.

“What if my tenant causes damage?”

Vandalism coverage protects you, but you should also collect a security deposit and screen tenants carefully.