Landlord Insurance in Texas
Experts break down landlord insurance costs, coverages, companies, and more in Texas.
Maybe you own a house in Dallas that you lease to young families. Or perhaps you own a couple of condos in downtown Austin that you rent out to area executives. Regardless of the type of home, if you own a property that is occupied by tenants, you can benefit from having landlord insurance.
Independent agents are available to help you find an ideal landlord insurance policy. These agents can provide you with customized quotes from a few competing insurers so you can be sure you are getting the coverage you want at a good price. Find an independent insurance agent near you to learn more.
What Is Landlord Insurance?
Landlord insurance is a type of homeowners policy that is designed to meet the specific coverage needs of those who rent properties out to tenants.
Investing in rental properties in Texas is a great way to earn some extra money. However, it does have some risks. Covering your property and protecting your finances with a reliable landlord insurance policy increases your chances of having a profitable experience.
How Much Does Landlord Insurance Cost in Texas?
On average, landlords in the United States spend about $1,083 a year on their landlord insurance policies. Rates are likely to be higher than that in the many parts of Texas that are susceptible to severe hazards like hurricanes, tropical storms, wildfires, and tornadoes.
Landlord insurance policies typically cost about 25% more than what you would spend on a traditional homeowners insurance policy for the same property. Costs are based on factors like:
- The age, size, condition, and value of the property you are insuring
- The type of property you are renting out (e.g., single-family detached house, multi-family home, condo, townhouse, mobile home, etc.)
- The number of tenants living in your property
- The amount you are charging for rent each month
- The crime rate and weather risks where your property is located
Comparing quotes from a few different insurance companies enables you to choose the policy that is offered at the most competitive price. Independent insurance agents make comparison shopping easy.
Is Landlord Insurance Required in Texas?
If you rent your property out to tenants, the type of policy you will need to cover it with is based on how the property is used.
- Long-term rentals: If you have tenants occupying your property for a month or longer, you will likely be required to carry landlord insurance instead of homeowners insurance.
- Short-term rentals: If you frequently rent your home to tenants on a short-term basis, such as if you have it listed on VRBO or Airbnb, you will likely be required to cover it with a business insurance policy.
- Infrequent rentals: If you have occasional tenants staying in your home for short-term rentals, you will likely be able to get coverage simply by adding an endorsement to your homeowners insurance policy.
If you are uncertain about how you should cover your rental property, you can consult a financial advisor or a local insurance professional for advice.
What Does Texas Landlord Insurance Cover?
The primary function of landlord insurance is to provide landlords with coverage against:
- Property damage
- Liability Risks
- Loss of Income
Each of these coverage types will be explained in greater detail below. By adding a few coverage options to your policy, you can get even more coverage.
How Does Texas Landlord Insurance Cover against Property Damage?
Your landlord insurance policy will offer two types of property coverage:
- Dwelling insurance: This covers the structure of the building including its foundation, electrical and plumbing systems, built-in appliances, furnace, air conditioner, and water heater.
- Contents insurance: This covers your own property inside the house such as light fixtures, flooring, and any furniture you may have included with the rental. You will not be covering your tenants’ property. They are required to do that themselves with renters insurance.
Your policy can cover the cost to repair or replace your property if it is damaged by a covered event including things like:
- Severe weather events, such as hurricanes, tropical storms, thunderstorms, lightning, tornadoes, high winds, and hail
- Fires, including accidental fires and wildfires
- Property crimes, like theft and vandalism
- Damage unintentionally caused by your tenants
You will want to be sure your coverage limits are high enough to enable you to rebuild your property and replace damaged items in the event of a total loss due to a catastrophe like a fire.
Save on Landlord Insurance
Our independent agents shop around to find you the best coverage.
How Does Texas Landlord Insurance Cover against Liability Risks?
Landlords have a significant risk of being sued. Some potential problems that can result in costly liability lawsuits include things like:
- Injuries to tenants or their guests that can be attributed to negligence up upkeep on your part
- Fires caused by faulty wiring
- Medical emergencies or deaths caused by carbon monoxide leaks
Fortunately, the liability insurance included in your landlord insurance policy can cover expenses like court costs, legal fees, mediation costs, settlements, and judgments.
How Does Texas Landlord Insurance Cover against Loss of Income?
As an investor in rental property, you likely rely on the monthly income it provides to either supplement your income or to cover the mortgage payments.
But what if your property is damaged in a fire or the roof is blown off by a tornado? It could be a long time before you once again have a property that is suitable for renters to live in, and this means you can be looking at several months without your expected rental income.
Loss of income coverage, which is another part of your landlord insurance coverage, is designed to mitigate this problem.
This insurance can reimburse you for your income losses if your property is severely damaged by a covered event. Coverage can continue until repairs are completed and you once again have a property that is safe for habitation.
What Else Can Texas Landlord Insurance Cover?
Landlord insurance companies want to help ensure that rental properties in Texas remain profitable for their owners. That is why many offer a few coverage options that you may want to consider. These can include:
- Non-occupied dwelling coverage: This may be necessary for your property to be covered against damage if it has been unoccupied for an extended time.
- Building code coverage: This is a good idea if you own an older property. If it is damaged by a covered event, and contractors identify extra repairs that are necessary to bring it up to today’s prescribed code, this can pay for the additional renovation costs.
- Guaranteed income coverage: This is a risk-management product that can cover your losses if a tenant defaults on making rent payments. This coverage can continue for a set period of time, which is usually long enough to complete an eviction.
It is always a good idea to review the terms and costs of all available coverage options so that you can determine which, if any, are a good value for you.
What Is Not Covered by Texas Landlord Insurance?
As with any insurance policy, landlord insurance has some limitations. Specifically, your policy will not cover against:
- Intentional or malicious damage caused by your tenants: You would need to file a lawsuit to collect compensation.
- Flood damage: This is true even if the flooding is the direct result of a covered storm. To be covered against the damage that floods can cause, you will need a supplementary flood insurance policy.
- Normal wear and tear: Nothing lasts forever. If the aging hot water tank or refrigerator in your rental property stops working, you will need to cover repair or replacement costs on your own.
What Are the Best Landlord Insurance Companies in Texas?
The best landlord insurance companies are the ones that have a time-tested record of reliability and reasonable pricing. Independent agents in Texas have taken the time to build relationships with many the best insurance companies in texas.
This means that any policies and quotes your insurance agent presents you with are from companies you can trust to be there for you if a problem arises.
How Can an Independent Insurance Agent in Texas Help?
Local independent insurance agents are a wonderful resource when you are shopping for any type of insurance coverage. These agents are available to offer guidance and advice and can answer your coverage-related questions.
Also, because they are not tied to a particular insurance company, these agents are free to shop around to find you the coverage you want at the most competitive price.
It doesn’t cost anything to consult one of these experienced professionals. Contact an independent insurance agent near you to get started.
TrustedChoice.com Article | Reviewed by Jeffrey Green
©2023, Consumer Agent Portal, LLC. All rights reserved.