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Texas Landlord Insurance

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Texas Landlord Insurance

With proper due diligence, Texas can be an investment haven for a rental property investor. Among other things, the population numbers are surging, rents are rising, and state laws are favorable to landlords. But just like any other investment vehicle, investing in Texas has its fair share of risks, from flash floods, to tornadoes, to hurricanes, and everything in between. 

Fortunately for you, there is a way you can insure yourself and your property against possible financial damage. Landlord insurance can take away all the risks, ensuring you maintain a positive ROI for many years to come. 

As a landlord renting out a property in Texas, here is everything you need to know about landlord insurance. 

 

How Much Does Rental Property Insurance Cost In The Us? 

How much a rental property insurance premium costs will vary from one location to another. In Texas, the average rate across several different insurance companies floats around $3,600 a year.

 

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The basic cover will insure your property against liability costs, property damage, and loss of rental income. You may also take an extra cover that will take on more liabilities. What exactly will be covered will depend on the kind of policy you choose. 

 

What Is The Difference Between A Landlord Insurance And Homeowners Insurance? 

While both of these are meant to insure a home against unforeseen circumstances, they do cater to different situations. The major difference lies in what is covered under the policy. 

A homeowners insurance is just that – an insurance cover designed to cover the primary residence. Generally speaking, it covers the house structure, personal belongings, and offers liability coverage for guests. 

Landlord insurance protects your rental investment. It covers damage to the structure that may arise from bad weather, fire, or criminal activity such as a break-in. It may also cover legal liability arising from accidental bodily injury in connection with the property. 

 

What Is Covered By Texas Landlord Insurance?

No two policies are ever the same. They will differ from one landlord to another, and based on their own unique needs. That’s why landlord insurance covers in Texas are customizable beyond the basic plan. 

 

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Generally speaking, the following are some of the protections you can expect from a basic landlord insurance cover in Texas. 

Damage to the Structure

Structural damage’ is a general insurance term that describes damage to the structural integrity of the property. This is especially important to have covered in your insurance policy as it’s an ever-present risk in most areas in Texas. 

Structural damage will cover damage arising from vandalism, break-ins, and winds and storms. You can also take extras to provide more protection against things like hurricanes, earthquakes, and floods. The extras will, however, come at an additional cost. 

Damage to Personal Property 

A landlord insurance cover will also compensate you for damage caused to your personal property. This can include things like appliances, furniture, or other items you may have provided the tenant with. 

Legal Liabilities 

Many landlord insurance policies in Texas offer liability coverage. For example, medical costs arising from a person getting injured while on the property. 

Since property liability laws will usually hold the landlord responsible in such situations, having a landlord insurance policy will come in handy. 

Lost Rental Income 

Most landlord insurance policies in Texas will also cover lost rental incomes. Imagine not being able to earn any rental income after the property becomes uninhabitable due to fires, floods, or a hurricane. 

 

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Luckily, with a landlord insurance policy, you’ll rest easy knowing you’re still earning a rental income despite the situation. And this will go on until all the repairs have been done and your property is habitable. 

 

What Is Not Covered By Texas Landlord Insurance?  

The basic landlord insurance policy will only provide standard protections as already aforementioned. To get extra protections, depending on the risk profile in your area, you’ll need to take some add-ons. 

Common add-ons to the standard Texas landlord insurance policy include the following. 

Personal Belongings 

The standard landlord insurance policy will only cover damage to the policyholder’s belongings. For example, if you rent out a home with furniture, it’ll cover damage to things like furniture, electrical equipment, and white goods and soft furnishings. 

It will not cover damage to the tenant’s personal belongings. For tenants to get protection against loss or damage to their belongings, they will need a renter’s insurance cover. That’s why it’s important to require tenants to have a renter’s insurance policy before signing the lease. 

Negligent or Malicious Property Damage

Your standard landlord insurance policy will also not cover tenant damage stemming from negligence or carelessness. All you can do is ask the tenant to fix them before moving out. If the tenant moves out without doing so, you could file a lawsuit against them. 

Flood Damage 

In Texas, the standard landlord insurance policy will not cover damage resulting from floods. You will need to take it as an add-on, requiring you to pay an extra fee on your standard premium rates. 

 

Conclusion 

Texas landlord-tenant law doesn’t make it a requirement for landlords to have a landlord insurance policy. However, not protecting yourself and your property could leave you in serious jeopardy should a natural disaster strike or a legal liability arise. 

Make sure to shop around for the best coverage vis-à-vis the premiums. For expert help, look no further than McCaw Property Management. We are a trusted and experienced property management company in Dallas Fort Worth. Get in touch with us today!