Your property. Their home. Your protection.
Renting out your first house? Managing a growing portfolio? Here's what Texas landlords should know about protecting their property, rental income and everything in between.
You've got tenants.
Let's talk protection.
Maybe you're renting out your old house. Maybe you've just bought your first investment property. Or maybe you've been a landlord for years.
Whatever your situation, owning a rental comes with responsibilities, unexpected expenses and a few insurance questions worth answering before something goes wrong.
What is landlord insurance?
Landlord insurance is designed to protect property owners who rent their homes to other people.
Depending on your policy, it can help protect the building, provide liability coverage and replace certain lost rental income after a covered loss.
The building itself.
Helps pay for covered damage to your rental property from events such as fire or certain storms.
When accidents happen.
Can help with covered claims if you're legally responsible for an injury or property damage.
When the rent stops.
May replace eligible rental income if a covered property loss makes the rental uninhabitable.
The things you provide.
Depending on the policy, coverage may extend to appliances, furnishings and equipment you own for use at the rental.
Is landlord insurance required in Texas?
Texas doesn't generally require every residential landlord to carry a landlord insurance policy. However, mortgage lenders may require property insurance, and your loan agreement may specify coverage conditions.
Same house.
Different insurance.
A homeowners policy is generally designed for a home you occupy. Renting that home to tenants changes how the property is used.
A landlord policy is designed around the risks of owning a rental property.
Here's an example.
You move into a new house and decide to rent out your previous home.
Before your tenants move in, tell your insurance agent about the change.
Keeping your old owner-occupied policy without updating your insurer could create coverage problems.
Renting out a room, leasing your entire house and operating a short-term rental may all require different insurance arrangements.
Your tenants have a lease.
Storms don't.
From hailstorms in North Texas to hurricanes along the Gulf Coast, rental properties face many of the same weather risks as owner-occupied homes.
Wind & hail
Many landlord policies offer wind and hail coverage, but exclusions, limits and deductibles vary. Some coastal properties may need separate windstorm insurance.
Flooding
Standard landlord property policies generally exclude flood damage. Consider separate flood insurance for your rental.
Frozen pipes
Sudden and accidental water damage may be covered, depending on the policy. Coverage can be affected by maintenance, vacancy and reasonable precautions during freezing weather.
Separate storm deductibles
A wind or hail deductible may be calculated as a percentage of the insured building value, rather than a fixed dollar amount.
Review coverage property by property. A rental in Houston may face very different weather risks from one in Amarillo.
What happens when your tenants can't stay?
Imagine a covered fire damages your rental property. Repairs take several months, and your tenants have to move out.
Loss of rental income coverage may help replace eligible rent you would otherwise have received while the property is being restored.
Let's do some math.
Your rental generates $2,500 per month.
A covered loss makes the property uninhabitable for three months.
That's $7,500 in potential lost rent.
Depending on your policy's limits, conditions and restoration period, loss of rent coverage may help replace eligible income.
Covered property damage.
Lost rent resulting from an insured event that makes the rental uninhabitable.
Ordinary vacancies.
A tenant moving out, difficulty finding new tenants or ordinary nonpayment of rent.
Your policy isn't their policy.
Landlord insurance generally protects your property and your covered liability. It usually doesn't insure your tenants' personal belongings.
That's where renters insurance comes in.
Your side of the lease.
Designed for the rental building, your covered liability and optional landlord protections.
Their side of the lease.
Can help protect tenants' belongings, personal liability and additional living expenses after a covered loss.
Should you require renters insurance?
Many landlords include renters insurance requirements in their leases. If you're considering doing so, review your lease language, coverage requirements and applicable law.
Requiring renters insurance doesn't replace your own landlord coverage.
Not every rental is the same.
Your insurance needs can change depending on how you use your property. Make sure your insurer understands the arrangement.
Weekend guests?
Vacation rentals and short-term stays may require specialized coverage or endorsements.
Between tenants?
Extended vacancy can affect coverage. Ask about your policy's vacancy conditions and any required precautions.
Growing your portfolio?
Owners of several rentals may have different insurance options depending on the properties and how they're owned.
Know your boundaries.
Review the condo association's master policy and identify which parts of the unit you're responsible for insuring.
Own your rental through an LLC?
Tell your insurance agent how the property is titled. The named insured and coverage structure should match your ownership and rental arrangement.
Let's review the important stuff.
The right landlord policy depends on your property's replacement cost, location, rental arrangement and liability exposures.
Your dwelling limit should reflect estimated rebuilding costs, not simply the property's market value.
Consider the property's features, potential injury exposures and whether additional umbrella coverage may be appropriate.
Review the coverage limit, qualifying events and maximum payment period.
Pay attention to separate wind, hail or hurricane deductibles.
Standard landlord policies generally exclude flood damage. Review your property's flood risk.
Long-term tenants, short-term guests and extended vacancy can require different coverage arrangements.
Oh yeah.
Insurance.
Being a landlord means thinking about more than collecting rent. There's the roof, the plumbing, the unexpected repairs and the occasional very bad weather forecast.
Hey Charley is independent, so we can help you explore available landlord insurance options from multiple carriers.
Whether you're insuring your first rental or reviewing coverage across several properties, we'll help you compare your options.
You've got the property.
Let's talk protection.
New landlord? Adding another rental? Wondering whether your current policy covers everything it should? Let Charley take a look.
LET CHARLEY TAKE A LOOK →