Landlord Insurance Texas

Last updated: May 30, 2025

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"The first rule in investment is don't lose and the second rule in investment is don't forget the first rule." - Warren Buffett

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Landlord insurance in Texas is a specialized insurance solution built for property owners who lease out homes, apartments, or commercial buildings across the Lone Star State. Whether you own a single-family rental in Houston, manage duplexes in Dallas, or operate a portfolio spanning Austin, San Antonio, and smaller Texas towns, landlord insurance Texas is essential to protect your investment and address risks unique to Texas.

Unlike regular homeowners insurance, landlord insurance policies in Texas are custom-designed for the realities of being a rental property owner—addressing tenant liabilities, frequent severe weather like hailstorms and hurricanes, and other issues that are all too familiar in Texas.

Over the last several years, Texans have seen property insurance premiums steadily rise—driven by weather volatility and surging construction costs. Based on our deep dive into thousands of landlord insurance Texas policies, we find that many landlords are overpaying by up to 25% simply due to lack of access to expert agents who understand Texas-specific landlord coverage.

That’s why we launched the OfferMarket Insurance platform: to help Texas landlords compare landlord insurance quotes from 40+ leading providers. Our Texas-focused team reviews every policy to ensure you get the strongest coverage at the lowest price—helping landlords across Texas save thousands each year.

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What Risks Does Landlord Insurance in Texas Cover?

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A comprehensive landlord insurance Texas policy typically includes coverage for:

🏠 Property damage from fire, hail, hurricanes, tornadoes, and vandalism
⚖️ Liability protection if someone is injured on your Texas rental
💸 Loss of rental income when covered events leave your property unlivable
🌊 Flood insurance (separate policy if your Texas property is in a FEMA floodplain)

Property Insurance

Texas landlords face a range of threats: from hurricane-force winds along the Gulf Coast, to hail and tornadoes in the north, and wildfires in central Texas. The property insurance piece of your landlord insurance Texas policy is built to cover these regional risks—including covering temporary tenant relocation during repairs.

Texas landlord insurance is generally organized into three main coverage forms—Basic, Broad, and Special—each covering different types of perils.

Basic Form Perils

The most budget-friendly option for Texas landlords, Basic Form, protects against the following perils:

🔥 Fire
🌩️ Lightning
💥 Internal explosion

Extended Coverage (EC) Perils

In Texas, extended coverage perils can be added to the basic policy, often remembered by the mnemonic “WHARVES”:

🌬️ Windstorm (including hurricanes and tornadoes, which Texas is prone to)
🦹‍♂️ Civil commotion
🔥 Smoke (if not caused by fire)
🌨️ Hail (a common threat in Texas storms)
✈️ Aircraft
🚗 Vehicle impact
💥 Explosion
❗ Riot

For additional peace of mind, V&MM covers:
🏚️ Vandalism
🦹‍♂️ Malicious mischief

Broad Form Perils

Broad Form landlord insurance Texas policies add extra perils—often remembered as “BIG AFFECT”:

🥷 Burglary damage
🧊 Ice, sleet, or snow (important for North Texas ice storms)
🪟 Glass breakage
🚰 Accidental discharge of water or steam
🧊 Freezing objects
✈️ Falling objects
⚡ Electrical surge damage
🏚️ Building collapse
💥 Tearing asunder

Special Form Peril

The most all-encompassing option for Texas landlords is the Special Form, or “open perils”/DP-3 coverage (especially popular for single-family homes). This covers all direct physical losses except those specifically excluded. Always review your exclusions, which in Texas often include:

🌊 Flood (requires separate flood insurance in flood-prone Texas counties)
🌎 Earthquake (rare, but possible in West Texas; usually an endorsement)
🤡 Intentional damage
⚠️ Building code enforcement
🔌 Power failure off-premises
🇺🇸 Government action

General Liability Insurance

General liability insurance in Texas shields landlords against injury or property damage claims from tenants, guests, or vendors on your rental property. Coverage limits typically range from $100,000 up to $1,000,000 per occurrence.

For example, if a tenant slips during a rainstorm on your Houston rental property and sues, your landlord insurance Texas policy’s liability coverage helps pay medical bills and legal costs.

Business Interruption Insurance (Loss of Rent)

Texas landlords risk losing rental income if their properties are damaged by storms, fire, or other covered perils. Business interruption coverage in your landlord insurance Texas policy helps replace lost rent—so your cash flow stays stable during repairs.

This vital protection is generally affordable in Texas, usually about $1 per $1,000 of annual rental income.

Flood Insurance

Many parts of Texas—especially Houston, Dallas-Fort Worth, Austin, and along the coast—are vulnerable to flooding. If your property sits in a FEMA-designated flood zone, flood insurance is crucial. Texas mortgage lenders routinely require flood insurance coverage up to $250,000, purchased separately from your landlord insurance Texas policy, usually through the National Flood Insurance Program (NFIP). Check your property’s flood risk using FEMA’s Flood Map Service.

Landlord Insurance for DSCR Loans in Texas

If you use a Debt Service Coverage Ratio (DSCR) loan to finance your Texas rental, you’ll need landlord insurance Texas that meets your lender’s criteria. Insurers must be familiar with DSCR requirements, as premiums directly affect your loan approval and cash flow.

Typical Texas DSCR insurance requirements:

Our OfferMarket Insurance platform streamlines DSCR insurance for Texas landlords—helping you secure the right coverage at the best rate, fully aligned with lender expectations.

How Much Does Landlord Insurance Cost in Texas?

The price of landlord insurance in Texas depends on several important variables:

Location in Texas

Insurance companies rate Texas landlord insurance based on region. Properties near the coast, like in Galveston or Corpus Christi, or flood-prone areas in Houston may have higher premiums than properties in central or west Texas. Local repair costs also influence pricing.

Property Insurance Type

Texas landlords can select from Basic, Broad, or Special Form coverage. Special Form provides the most complete protection—recommended for most Texas rentals—though it comes at a premium.

Dwelling Coverage Amount

The single biggest factor in your landlord insurance Texas premium is how much dwelling coverage you purchase. Full replacement cost is always recommended to avoid underinsurance penalties.

Deductible

Opting for a higher deductible can lower your annual premium in Texas. Many Texas landlords choose deductibles of $5,000 or more for maximum savings.

Claim Frequency and Severity in Texas

Texas insurance companies look at your personal and property claim history. Frequent or severe claims—such as those related to windstorm damage, hail, or water intrusion from heavy rain—can drive up your rates.

Crime Score Impact in Texas

Neighborhood crime rates in Texas cities like Dallas, Houston, and San Antonio can raise landlord insurance premiums. Higher crime scores mean more risk for theft, vandalism, and liability claims. Landlords who invest in security systems or on-site management may qualify for discounts.

Property Condition and Maintenance in Texas

Properties in good condition usually get better insurance rates. Regularly updating plumbing and HVAC (especially to handle Texas heat) can prevent costly losses. Older homes or those needing repairs tend to pay higher premiums. Keep maintenance records to support lower rates.

How to Protect Your Rental Property in Texas

While landlord insurance Texas is crucial, proactive steps can further protect your rental.

Tenant Screening

Texas’s booming rental markets, from Austin to San Antonio and Dallas-Fort Worth, require careful tenant screening. Conduct credit and background checks on all adults. Set clear criteria, and require higher deposits or strong guarantors if exceptions are made.

Regular Maintenance

Texas’s climate—from summer heat to winter storms—calls for consistent upkeep. Inspect at least quarterly for roof, HVAC, foundation, and water issues. Keeping detailed logs can help you negotiate insurance premiums.

Tenant Maintenance Education

Teach your Texas tenants to do simple things like replacing air filters, shutting off the water during emergencies, and dripping faucets in winter to prevent frozen pipes.

DP-3 Insurance in Texas

DP-3, or Special Form, is the standard for Texas rental properties. It pays losses at replacement cost and covers nearly all physical damage except specific exclusions.

What is Coinsurance?

Coinsurance clauses penalize Texas landlords who underinsure their property. You’ll pay a share of any claim if you don’t meet the insurer’s required coverage percentage.

Formula

(Insurance Carried ÷ Insurance Required) × Loss = Claim Payment – Deductible

:
If your Texas rental’s replacement cost is $250,000, but you only insure for $125,000 (with a $5,000 deductible), a $50,000 loss results in:
($125,000 ÷ $250,000) × $50,000 = $25,000 - $5,000 = $20,000 from insurer;
You cover the other $30,000. Always insure for full replacement value.

Landlord Insurance Markets in Texas

Wherever your Texas rentals are located—bustling Houston, hip Austin, historic San Antonio, fast-growing Dallas, or small Texas towns—OfferMarket connects you with specialized landlord insurance Texas options.

Best Landlord Insurance in Texas

We recommend Texas landlords look for policies that include:

• Comprehensive property insurance tailored to Texas’s weather and risks

• General liability insurance to protect against tenant and visitor claims

• Business interruption insurance to secure your rental income

• Flood insurance if your property is in a floodplain

Work with experienced agencies who offer multiple carriers and know the nuances of Texas landlord insurance. Start your Texas landlord insurance quote with OfferMarket Insurance now!

Landlord Insurance Guidelines for Texas DSCR Loans

Below are best-practice guidelines for landlord insurance Texas to satisfy DSCR lenders:

Property Coverage

Coverage Type	Requirement
Property Insurance	Mandatory, AM Best Rating A- VIII or higher, 1-year term
Limits	80% of replacement cost or loan amount, whichever is higher
Deductible	$5,000
Policy Type	Special Form (Dwelling Fire or Commercial Property)
Cancellation Notice	30 days
Lender’s Designation	Mortgagee

General Liability Insurance	Requirement
Mandatory	Yes
AM Best Rating	A- VIII or higher
Limits	$500,000 per occurrence, $1,000,000 aggregate
Deductible	$1,000
Coverage	Occurrence basis
Cancellation Notice	30 days
Lender’s Designation	Additional Insured

Business Interruption Insurance	Requirement
Mandatory	Yes
AM Best Rating	A- VIII or higher
Limits	One year of gross rental revenue
Cancellation Notice	30 days
Lender’s Designation	Mortgagee

Flood Insurance	Requirement
Mandatory if in flood zone	Yes
AM Best Rating	A- VIII or higher
Limits	$250,000 or loan balance, whichever is greater
Cancellation Notice	30 days
Lender’s Designation	Mortgagee

Detail	Information
Mortgagee Clause	OfferMarket Capital LLC ISAOA/ATIMA 627 S Hanover St Baltimore, MD 21230
Condos and PUDs in Texas	Blanket policies allowed if individual units are covered. Associations must keep all-risk coverage for common areas and equipment at 100% replacement cost.
Instructions	Use ACORD forms for compliance. Submit certificates, invoices, or paid receipts at least 24 hours before closing. Final policies must be submitted within 60 days. Notify carriers if a property becomes vacant; get a vacancy permit if needed.