Tennessee has roughly ~930,000 renter-occupied units. Average DP-3 landlord premium runs $1,430/yr — about 25–30% above a comparable homeowners policy due to higher liability and vacancy risk. Market profile: Nashville is one of the nation's hottest rental markets; Memphis, Knoxville, and Chattanooga anchor secondary markets; Smoky Mountains is a top STR destination. Short-term rental climate: Nashville is among the nation's most active STR markets; Great Smoky Mountains area (Gatlinburg, Pigeon Forge, Sevierville) is a top STR vacation corridor; state is generally permissive of STRs.
Avg DP-3 Premium
$1,430/yr
Annual landlord/rental cost
Rental Units
~930,000 renter-occupied units
Renter-occupied housing
STR Climate
Nashville is among the nation's most active STR markets; Great Smoky Mountains area (Gatlinburg
Nashville is among the nation's most active STR markets; Great Smoky Mountains area (Gatlinburg, Pigeon Forge, Sevierville) is a top STR vacation corridor; state is generally permissive of STRs
| Topic | Detail | Notes |
|---|---|---|
| Market profile | Nashville is one of the nation's hottest rental markets; Memphis, Knoxville, and Chattanooga anchor secondary markets; Smoky Mountains is a top STR destination | Drives coverage form selection |
| Top landlord carriers | State Farm, Allstate, Farmers, Tennessee Farmers Mutual, Travelers | Specialized DP-3 underwriting |
| Short-term rental environment | Nashville is among the nation's most active STR markets; Great Smoky Mountains area (Gatlinburg, Pigeon Forge, Sevierville) is a top STR vacation corridor; state is generally permissive of STRs | Airbnb-specific coverage needed |
| Notable state law | Tennessee's landlord-tenant act has specific notice requirements; Nashville requires STR permits; no statewide rent control; landlord-friendly courts | Affects landlord obligations & coverage |
DP-3 (Dwelling Fire) is the standard landlord policy form, covering the structure on an open-perils basis. Landlords also need liability coverage (often $300K–$1M) and Loss of Rents (typically 12 months). Standard homeowners policies do NOT cover rental properties.
Tennessee's rental market has experienced extraordinary growth driven by Nashville's emergence as a top-tier destination for corporate relocations, tourism, and entertainment. Davidson County's rental market has absorbed massive in-migration from coastal cities, driving both multi-family construction and strong single-family rental demand. The Great Smoky Mountains corridor — Gatlinburg, Pigeon Forge, Sevierville, and Townsend — is one of the nation's single most active STR markets by property count, with tens of thousands of cabins and chalets available for short-term rental tied to the nation's most visited national park. Memphis serves as a logistics and music industry rental hub. Tennessee sits in a region with tornado and severe thunderstorm risk, particularly in the western half of the state.
Tennessee landlords should select DP-3 open-perils coverage with strong wind and hail provisions, particularly for western Tennessee properties in the Memphis and Jackson areas. Nashville landlords should carry substantial liability coverage given the city's booming growth, active nightlife-related activity, and sophisticated tenant base. Smoky Mountain STR operators — the defining market for Tennessee vacation rentals — need vacation rental policies covering transient occupancy, cabin-specific risks (wood-burning stoves, outdoor decks, steep terrain), and seasonal income. Nashville requires STR permits and distinguishes between owner-occupied and non-owner-occupied STRs. Loss-of-rents coverage is particularly valuable for Smoky Mountain cabins where a covered loss during peak fall foliage season could mean massive income disruption.
A DP-3 dwelling fire policy is the standard landlord form. Unlike an HO-3, it covers the building structure and landlord-owned contents (appliances, lawn equipment) — not the tenant's personal belongings. Tenants must carry their own renters insurance. DP-3 also includes loss of rents coverage (typically 12 months) if a covered loss makes the unit uninhabitable.
Standard DP-3 policies often exclude or limit short-term rental (Airbnb/VRBO) use. Most landlord carriers either require an endorsement, a separate STR policy, or a commercial dwelling policy. Airbnb's "AirCover" host protection is NOT a substitute for your own policy — it has many exclusions and lower limits.
Tennessee's landlord-tenant act has specific notice requirements; Nashville requires STR permits; no statewide rent control; landlord-friendly courts
💡 Tennessee Pro Tip
Tennessee landlords in Nashville typically pay $1,150–$1,750/year for DP-3 coverage. Memphis area properties run $1,100–$1,650. Smoky Mountain cabin properties — often high-value structures with hot tubs, decks, and mountain views — need vacation rental-specific coverage costing $1,500–$3,500 depending on structure value and rental volume.
No — standard landlord policies exclude transient-occupancy rentals. Nashville STR hosts must obtain a Metro Nashville STR permit. Smoky Mountain cabin STR operators are one of the most established STR markets in the country — specialty carriers like Proper Insurance and Foremost are very active in the Sevier County vacation rental market.
Tennessee has no state law requiring landlord insurance. Mortgage lenders require coverage. Nashville's rapidly appreciating property values mean it's critical to update replacement cost limits annually — being underinsured on a $500,000 Nashville rental is a growing risk as construction costs have also escalated significantly.
Rental unit counts from US Census American Community Survey; premium averages from 2026 carrier rate filings for Tennessee. Verify your specific property's coverage with a licensed agent.
Sarah Mitchell
Editorial Lead, Property & Casualty
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed May 2026
We monitor rate filings in all 50 states. Get notified when rates change in your area — and discover new ways to save.
Free forever. Unsubscribe with one click. No spam, ever.
Important Disclaimer
This site provides general educational information only and is not a substitute for professional insurance advice. All rates, data, and coverage details are estimates and may not reflect your actual premiums. Insurance availability and pricing vary by state, insurer, and individual risk factors. Always consult a licensed insurance professional in your state before making coverage decisions.