RENTAL PROPERTY INSURANCE IN TEXAS

What is rental property insurance?

Rental properties are significant investments, and landlords should protect their investments when possible. Purchasing rental property insurance is often one of the most important ways to protect a property in Texas.

Rental property insurance gives landlords access to tailored coverages for their rental properties. A good policy could protect properties and also the landlord.

What types of Texas rental properties is investment property insurance used for?

Most Texas rental properties should be covered by some form of investment property insurance. Rental property policies are mainly for smaller residential properties.

Smaller residential is often defined as properties with fewer than five units. For example, single-family homes, duplexes, triplexes, and quadplexes are often insured by rental property policies. Condominiums and townhouses may be too.

Residential properties with five or more units might require a different type of commercial real estate loan, and possibly a slightly different type of investment property insurance.

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Are landlords required to insure their rental properties?

Landlords who leverage through real estate loans are frequently required to carry certain investment property insurance coverages for the property itself. Lenders frequently include a requirement so that the collateral on the real estate loan is protected.

Coverages are broadly recommended regardless of any lender requirement, though. It’s also normally prudent to get more coverages than a lender requires, such as additional protections for a property and protections for the landlord.

What coverages do investment property insurance policies provide?

Investment property policies, whether underwritten for smaller or larger properties, may provide a variety of important coverages. Some of these include

Dwelling Coverage Typically insures rental properties themselves, usually covering a building and associated structures against damage.
Landlord Contents Coverage Typically insures items stored at rental properties, when the items are owned by the landlord. These could be lawn equipment, appliances, and furniture in a furnished property.
Loss of Income Coverage Typically insures against unreceived rents when a disaster renders a property uninhabitable.
Rent Guarantee Coverage Typically insures against unreceived rents when tenants fail to make their payments for an extended period.
General Liability Coverage Typically insures against basic accidents where tenants, visitors, or others sustain injuries while at a property.
Legal Assistance Coverage Typically insures against expenses for legal actions other than defending against liability lawsuits. These could be attorney and court fees paid for evictions or judgments.

Do landlords need rent guarantee coverage?

Rent guarantee coverage is one protection that many landlords should consider, but might not be necessary in all cases.

If landlords aren’t immediately dependent upon tenant payments to cover immediate expenses and a property isn’t financed then it might make sense to skip the coverage. These are usually landlords who pay cash, hold properties mainly for long term gains, and are otherwise financially stable.

If landlords need tenant payments to cover immediate expenses, rent guarantee coverage is usually recommended so that payments can be made even if tenants don’t pay their rents. The coverage is usually required if a property is financed, as lenders want to make sure monthly loan payments can be made.

Sorting through details like this is something that an insurance agent specializing in investment properties can help with.

Can landlords insure multiple properties with one rental property policy?

Yes, it’s usually easy to cover multiple rental properties with one insurance policy. Not all policies automatically do this, but plenty of policies can be customized so that they cover more than one property. A knowledgeable insurance agent can help customize a policy.

How much does insuring a rental property cost?

The cost of rental property policies depends on many factors, such as property type, property size, number of units, location, construction, and more. An independent agent can help landlords compare quotes from different insurers, to see how much insuring their property will be.

Where can landlords get rental property insurance for properties in Texas?

If you need help insuring rental properties that are in Texas, contact the independent insurance agents at WISE Insurance Group. We’ve helped many landlords insure investment properties large and small, and we’ll find rental property insurance that’ll protect your properties and you well.