The first step to getting landlord insurance in Texas is to evaluate the cost of your real estate investment. Though landlord insurance is not required by law in Texas, it is a safe way to guide yourself if you manage and rent a personal property. It is also important to know that the homeowners insurance policy will not cover any damages to your rental properties.
When evaluating your real estate investment, make sure to consider the following:
Building ordinance coverage can be helpful as it pays the increased costs expected to meet the current building codes when replacing or repairing a rental home. It also pays for demolition and additional cost associated with complying with the established building codes for remodeling and renovation of the parts of your rental home damaged by a covered peril.
After evaluating your needs and considering your budget, the next step is to shop around for insurance quotes offered by authorized property and casualty insurance companies.
|Some of the Top Insurance Companies offering Landlord Insurance coverage in Texas
(in alphabetical order)
Be sure to compare quotes with a licensed insurance professional. Licensed insurance agents are familiar with the local insurance market and can get you the most affordable landlord policy based on your needs and budget. Agents give you a free landlord insurance quote if you provide them with the property address and your details.
Landlord insurance is rental property insurance, which is not a legal requirement to own property in Texas. If you have a mortgage on your rental property, your mortgage lender will advise you to get landlord insurance. However, as a landlord who allows strangers and/or businesses to use its property temporarily, you need to protect your investment:
Landlord insurance helps cover property owners from perils associated with renting out the property. It gives the landlord liability insurance protection and dwelling coverage in one package. You can purchase additional coverage, including “Lost Rent Payments”, for an extra fee.
In 2023, there were over 9.3 million properties in Texas in need of some type of landlord insurance (approximately 4.5 million residential dwellings and 4.8 million commercial properties).
If you are an owner of a rental property and you do not have landlord’s coverage, you need to discuss your options with a Texas-licensed Residential Property and/or Commercial insurance agent_. _As professionals, they help you interpret your needs regarding what coverage you could require. Based on their experience, they can shop around for quotes and guide you in selecting a policy that best suits your needs.
When shopping for landlord insurance, look for a state-licensed insurance professional. An experienced property insurance agent understands the current landlord insurance market and value, and can match you with coverage that meets your insurance needs for the most affordable price and from the best insurance company for your niche.
By working with a knowledgeable independent Texas agent, you get options from multiple insurers. Alternatively, you can shop for coverage online and submit an online quote or reach out to your favorite insurance company with a call. As a result, you will be connected to a “captive” agent from the desired company, to go over the coverage and to finalize the quote.
Important note: Captive insurance agents are usually not able to offer alternative insurance coverage options from other insurers, which are not offered by their employer organization. At the same time, not all captive insurers allow independent agents to represent their products. To get the best results, compare results from multiple sources.
In Texas, there are at least three landlord insurance coverage options from which you can choose, depending on your needs and the rental property type:
Depending on your insurance needs, there is room for additional coverage where you can mix and match these coverages in your landlord policy.
To qualify for landlord insurance, you must own a property located in Texas, that is primarily meant for rental purposes.
You can buy landlord insurance from any Texas P&C provider that is registered with the Texas Department of Insurance (TDI), that offers landlord insurance coverage in your county or zip-code. Speak with a licensed and knowledgeable insurance professional who is familiar with the current local landlord insurance offerings.
If you already have an active insurance policy on the same property or any different location, discussing it with your current insurance agent/provider is an excellent place to begin. If your insurance provider runs a general lines company, you are likely to find a landlord insurance package within the variety of policies they sell. By bundling the new landlord coverage with the existing policies you will likely get a bulk discount.
After you have checked the quote from the existing insurer, or if you did not have an existing property insurer, ask an independent Texas-licensed insurance agent to check for the best alternatives of coverage. Upon request, an agent can assist you in getting as many quotes as are available within your locality, from which you can choose the plan that best fits your needs.
While you could buy landlord insurance from any property and commercial insurance company that offers it in your area, the most affordable coverage is usually obtained through one of the two methods:
Always ask a professional to review your coverage choice prior to committing to the policy.
A minimum of three different landlord insurance quotes from different insurers is usually required for balanced comparison when getting landlord insurance in Texas. The more quotes you get, the better your chances of getting a more suitable policy.
To apply for landlord’s insurance in Texas, you need to follow a few steps:
Once you decide on your coverage goals, shop multiple insurance carriers for multiple quotes, review the document with your insurance agent and seek clarifications on not fully understood “gray” areas.
Walking through the entire process with an experienced insurance agent is the most effective way to purchase rental property insurance in Texas. Your insurance agent does not charge you; their service is paid by the insurance company you end up choosing.
Only insurance professionals licensed in the appropriate type of insurance can help you with an application for landlord coverage - either a residential property or a commercial property insurance agent. If you choose an independent agent, they can help you apply for coverages with multiple insurers. If you apply directly with the insurer, it will assist you by assigning one of their employee agents to help you to compare the plans offered by their organization.
A licensed Texas insurance agent is required for finding, applying, and buying landlord insurance. The agent serves as your representative, finding you the best landlord policy to provide coverage, and then making sure that all paperwork is filled out properly. If there are any questions about coverage or if premium financing is needed, the agent taps into their resources and resolves any issue that comes up. The agent’s purpose is to make your and your insurer’s life easier, by expediting communication, properly filling out the application paperwork, and continuing to represent the insured during coverage. At least once per year, your agent should help you reassess the insurance needs and make sure that the coverage is adequate for the current market.
Read more about Can You Purchase Landlord Insurance Through an Agent
Anyone who owns a property that they use for rental purposes in Texas can get landlord insurance. (Owner-occupied properties do not qualify)
You can obtain landlord insurance anytime you decide to protect your rental properties against unforeseen circumstances. The coverage generally begins as soon as the tenants move in and lapses 30 days after they move out (unless another tenant moves in).
Yes, it is possible to over-insure your property but not advisable, since it benefits only the insurer. Over insurance is when you are paying too much for coverage that you cannot utilize. If you could get coverage for a property for $800,000, but its real replacement cost is $750,000, in the event of a covered loss the insurance company will pay the replacement value based on the local market and not the full coverage limit. In this case, the property is overinsured by $25,000, which means that the insured is also overpaying. Although your claims will be based on replacement value, you must understand the valuation index of your property. While some parts depreciate with time, some others appreciate. To ensure that you are not over-insuring your property, conduct a yearly valuation to assess how much it will take to replace them. You can objectively price your policy and review the agreed value based on the statistical data available to your insurer.
Consider a broader spectrum of coverage rather than over-insuring your property with a particular coverage. The more comprehensive the coverage, the more likely you will cover many named perils rather than overpaying for a limited number of perils. Be sure to consult with a Texas-licensed P&C insurance agent for professional advice on getting additional coverage instead of buying more than you need on specific coverage.
When you over-insure your property with landlord insurance in Texas, you typically pay more than you should as premiums. If your agreed-upon valuation is significantly lower than the chosen coverage of your policy, you are giving away tens of thousands you will never get back even if you file a claim. It is advisable to discuss your options with your insurance agent to determine other means of getting additional protection instead of over-insuring your property.
You should not over-insure your property (rental or live-in) with property damage coverage that you will not be able to access after a claim. Insurance will properly cover the damage to your property up to the value of the property, not the maximum coverage.
On the other hand, personal liability and premises liability coverage, which covers the landlord if someone gets hurt on the premises, can be obtained for larger amounts - if desired. You can increase the coverage inside the landlord insurance policy or use a separate Umbrella liability insurance policy to create an even larger coverage.
Discuss your desired coverage limits with a licensed Texas property insurance agent, who can advise you on the most comprehensive and affordable options.
No. Buying too much landlord insurance in Texas means you are paying for coverage that you do not need.
Different landlord insurance policies suit different customers and categories of needs. Regardless of the type of property and the coverage limits, best landlord insurance policies need to cover three main needs:
While property landlord insurance protects the underlying financial investment in the physical structure of the building and its internal components, liability coverage protects the landlord’s overall wealth. If someone gets hurt on the property and files a lawsuit, the landlord’s total net worth becomes exposed. Quite frequently, if the landlord has multiple rental units or an apartment building, they get umbrella coverage to provide additional liability protection.
Ensuring uninterrupted fair rental value in case the building is vacant during the repairs, landlords usually get the business interruption coverage. This way the stream of income continues regardless of the occupancy.
There are two main groups of landlord insurance in Texas:
Residential landlord policies in Texas are:
Dwelling Policy 1: This policy provides the most limited coverage. Also known as DP-1, it is a basic policy covering the following losses:
Dwelling Policy 2: This policy is also referred to as moderate coverage. The main difference between DP-2 and DP-1 is that DP-2 pays replacement costs (RCV) rather than actual cash value. Dwelling policy 2 also incorporates coverage for all perils in DP-1 and damage to your property arising from natural disasters or infrastructural accidents. Examples of covered infrastructural accidents are electrical damage, breakage of glass, damage arising from the weight of sleet or snow, falling objects, and the freezing of pipes. This policy pays for loss of income if the property is vacated for some time to allow for repairs
Dwelling Policy 3: This policy is known as comprehensive coverage. It provides the broadest form of protection from liabilities. While DP-1 and DP-2 policies list specific perils and may deny claims for excluded events, DP-3 is an "open peril" type of policy
Commercial landlord policies in Texas include:
A Texas-licensed insurance professional can help you choose the best-suited coverage options according to your insurance requirements.
In Texas, if you want to reinstate a canceled landlord's insurance, which was stopped due non-payment, do the following:
You should discuss reinstating your landlord insurance policy with your insurance provider. If you qualify by the terms and conditions of your policy contract, you may be allowed to reinstate your policy. Most insurance providers permit three to five years to reinstate a canceled insurance policy. Generally, your policy term has a grace period (30-31 days), during which you must update your payments to avoid a policy lapse.
To find out the type of landlord insurance you have in Texas, read your policy contract. If you cannot find your policy document, contact the insurance agent on your policy for information. Otherwise, you may engage the insurance company directly. You can look up the address of your insurance provider through their website or by looking through any email communications you have had.
First off, no one can purchase a landlord insurance policy for your property without your consent. If you are heir to insured rental property in Texas, the policy documents should be part of your holding documents. Also, if you are up to date in paying your landlord insurance premium, you should always expect to have coverage. Besides, if you are about to lose coverage, your insurance provider will contact you ahead of time.
Yes. You can combine a landlord insurance policy in Texas with other insurance types to get an overall lower rate. Bundling policies with the same insurance company may qualify you for discounts. If you are looking to buy a cost-effective landlord policy in Texas, engage a licensed insurance agent. A knowledgeable agent can help you bundle policies to maximize the discounted rates.
Yes. In Texas, you can bundle landlord and auto insurance policies together to save money, as long as the coverage is of the same type: Private residential with private auto, and Commercial property with commercial auto. If you can find multiple insurance products from the same insurance carrier you will almost always save even more money by bundling them.
Your Texas-licensed insurance agent can show you how much bundling can save you in the long run.
Yes, having landlord insurance in Texas is a good deal. In fact, as a rental property owner, you need to protect your investment and your bottom line. The property damage from unforeseen events and liability lawsuits from the tenants can cause you to spend tens of thousands or more out of your pocket if you do not have this coverage. With a properly structured landlord insurance policy, your insurance company protects you from both events. Speak with a knowledgeable and licensed Texas property insurance agent to help you structure the best deal for your needs.
Your landlord insurance provider will notify you by mail or email to renew your insurance in Texas before it expires. Insurance companies always do this before the end of the policy term. If you are not clear about any details, immediately contact your insurance agent or the insurance provider for clarification. If you are considering switching insurers, the renewal period may be the best time to speak with a Texas-licensed insurance agent, to discuss alternative options of coverage.