Do you own a home or apartment and rent it out to others?
Also known as a Rental Dwelling Policy, Landlord Insurance is similar to homeowners insurance, and these policies are specifically designed to insure common landlord risks.
Homeowners who rent out a home or apartment for at least 6 months of the year will need to purchase a landlord insurance policy.
On average, landlord insurance policies can cost around 25% more than a homeowners policy, due to the additional risks that come along from letting someone else rent your home. Because of these additional risks, having a proper landlord insurance policy is more important than ever.
As an independent agent, TexPro Insurance partners with several Texas-specific landlord insurance carriers; we can help you shop for the optimal policy.
What does Landlord Insurance cover?
Property Coverage: This would cover the actual structure of the building, as well as the garage, storage buildings, fences, etc. This would also cover the owner’s property such as appliances, TVs, etc. that are for tenant use.
Liability Coverage: This protects the property owner from liability claims that arise if someone is injured on the property. For example, if your tenant falls and hits his head on your property, they may sue you. However, if a tenant’s guest is injured on the property, it is most likely that this would be covered by the tenant’s renters insurance policy. (explained more below about renters insurance)
Loss of Income Coverage: if your property is damaged by a covered event, this will cover the loss of income if you can’t rent out your home until repaired. Depending on insurance carrier, this may be considered an option.
Landlord Insurance Vs. Renters Insurance
Landlord Insurance is designed for property owners to provide liability and protect the property that they own. For example, if a homeowner leaves appliances in the unit for tenant use, this would be covered by the landlord policy. However, this will not provide any coverage for the tenants' personal property; coverage for a tenant's belongings would come from their personal renters insurance policy.
Before a tenant signs a lease on your property, you should require your tenant to have a renters insurance policy. This will help protect you from any liability that the tenant becomes responsible for on your property. You can specify this in the contract by requiring them to add you, the landlord, as an additional insured on the policy.
What other types of insurance should I consider in addition to Landlord Insurance?
To fully insure your asset as a landlord, here are some other suggested insurance policies available:
Liability limits through a landlord policy do have a maximum just like a homeowners policy. Depending on how you are renting out your property, an umbrella policy can be extremely important to have in your insurance portfolio.
For example: You own an apartment and a wiring fire causes your apartment and the entire apartment building to burn down. In this case, an umbrella policy would provide coverage above your standard landlord insurance policy limits.
Flood damage is typically excluded from a homeowners and landlord insurance policy. If you're in a flood zone, sometimes these policies are required by your lender. However if not required, this is a great insurance tool you should consider to protect your home from flood damages.
For more information, you can visit our page our website page about flood insurance:
What additional steps can I take before renting out my property?
Regularly maintain and service your property: Making sure to upkeep your property can protect you from liability claims and protect your tenants from any harm.
Work with an attorney to carefully word your lease language to protect yourself from any additional liability
Purchase the maximum amount of insurance you can, and make sure to consider the optional coverages for every property.
Require your tenant to purchase renters insurance and include you as an additional insured.
Consider putting your rental property into an LLC