Being a landlord provides several advantages in Texas, with more cities increasing in popularity. However, it does not come without certain risks.
In terms of natural disasters, Texas is categorized to be heavily at risk for floods, hurricanes, and wildfires on top of the common risks of renting out your property. Knowing this, you must get protection through landlord insurance.
This article will provide ample information about landlord insurance, including its costs and coverage. We also provide tips you can follow before signing up for an insurance policy in Texas.
Defining Texas Landlord Insurance
Protecting your rental property in the Lone Star State requires a home insurance policy, which is Texas landlord insurance. Just like the usual homeowner’s insurance policy, it will cover all damages from specific events.
Outside of those, there will be additional coverage for other risks that come with renting out your property depending on your chosen policy.
When you have landlord insurance, you can rest easy knowing that you are protected from potential financial losses, ensuring your rental business continues to flourish no matter if serious catastrophes like fire, earthquake, or hurricanes occur.
How Landlord Insurance Differs from Homeowners Insurance
Mainly, you just need to ask the beneficiary of the policy. If the party that will benefit from the insurance protection is the landlord, then this is landlord insurance versus the homeowners insurance, where the party that will benefit is the homeowner.
Coverage of Texas Landlord Insurance
Insurance coverage will differ based on the needs of every person. However, with a landlord insurance policy, you can pay for additional inclusions if it is not part of the plan you are purchasing.
In Texas, landlord insurance policies focus on four areas:
Property Structural Damage
In case of heavy damage to your property, especially caused by natural disasters, you will be covered for repairs and property restoration.
Since Texas is a high-risk area and prone to severe storms, you must add coverage for natural disasters, including break-ins, and vandalism to ensure that you won’t experience financial losses from your investment property.
Personal Belongings Damage
Should damage occur to your personal belongings, you will be insured. Your rental property items, such as furniture and appliances can be replaced through your insurance.
Landlord Liability Coverage
When accidents happen in your rental property that leads to injuries, you can access medical liability coverage to reduce steep costs that landlords may not notice they are accruing.
Loss of Income Protection
At times, you may be unable to receive any rental income when your Texas property is damaged. This type of coverage protects you in case a disaster hits and you won’t be able to collect an income.
What Is Not Covered by Texas Landlord Insurance
Not all coverage is included in the typical landlord insurance. Some must be purchased as separate add-ons to the policy. Generally, here are some items that are not automatically offered for protection:
Belongings of Tenants
Mostly, only the policyholder’s possessions are included in the landlord insurance coverage. Tenants need to obtain a renters insurance policy to protect their personal belongings. Generally, landlords request renters to get this insurance as part of the requirements.
Intentional Damage
Insurance companies won’t cover any damage caused by renters intentionally. Landlords need to file a lawsuit against the renter.
Flood Damage
For standard landlord insurance, it is rare to include protection against flood damage, although top insurance companies in Texas can include this feature through the National Flood Insurance Program.
Should your rental property be built in an area prone to flood risk, it is recommended to consider including it as a policy an add-on.
Wear and Tear
Wear and tear is a natural occurrence since things decline after some time. You can be protected from the costs of damage from broken items.
Legal Liability
You can consider this as an add-on to your standard insurance policy to defray the legal costs if a renter sues you, for example. Legal fees can be hefty, even if you are the one filing a lawsuit against a renter to collect the overdue rent collection or evict them from your premises.
How Landlord Insurance Policy Can Benefit You
- In case a fire breaks out, you can restore your property’s interiors that were damaged from the incident with a property damage liability cover
- In instances where your rental unit got damaged from a storm, you will be covered by landlord insurance depending on the policy you subscribed
- Medical expenses can run high for renters who were injured on the property, but your insurance can cover the costs
Computing for Texas Landlord Insurance Costs
Your insurance cost calculations will depend on these factors:
- What is the size, age, and state of your rental?
- What coverage type will you need?
- What are the coverage limits and deductibles?
- What is the risk exposure for your specific property?
- What add-on coverage will you need?
You can get a landlord insurance quote for free online or through an insurance agent. However, a thorough inspection will be a requirement before you get the final insurance price.
Bottom Line
While Texas landlord insurance is not required, landlords should consider getting one to reduce the heavy costs associated with liability and serious repairs.
Otherwise, you can be vulnerable to hefty expenses. Review different insurance policy coverage from providers and select the best one that will align with your insurance needs.
Resist focusing on the insurance price solely and go for an insurance policy that offers the best coverage while giving you excellent protection.
If you are looking for a property management company that can oversee your rental space, contact Bigham and Associates today!
