Landlord Insurance in Texas

What landlord insurance covers in Texas

Landlord insurance is the policy that covers a Texas property the owner rents to someone else, written on a dwelling form rather than on a homeowners form.

A landlord policy covers four things:

• The dwelling and other structures on the lot, such as a detached garage or a fence
• The owner’s property kept at the site for maintenance, such as appliances, a mower, or tools
• Loss of rents, which pays the rent the property would have earned while it is unlivable after a covered loss
• Liability for injury to a tenant or a guest, and for damage the owner is responsible for

A homeowners policy is the wrong contract for a rental. Homeowners forms are written for an owner-occupied residence, and a claim on a house the owner moved out of is where that mismatch turns expensive.

DP-1 and DP-3 are not the same policy

DP-1 and DP-3 are two dwelling forms with the same name on the front and very different coverage inside.

	DP-1	DP-3
Perils covered	Named perils only, starting with fire, lightning, and internal explosion	Open perils on the dwelling, covering anything not excluded
Wind, hail, riot, smoke	Added by an extended coverage endorsement	Included, subject to the wind and hail deductible
Vandalism	A separate option, often restricted	Included, subject to vacancy limits
Loss settlement on the dwelling	Usually actual cash value	Usually replacement cost
Where it fits	Older, lower-value, or harder-to-place property	Standard rental property in sound condition

The form letter on the declarations page answers most of what a landlord needs to know.

How loss of rents coverage works

Loss of rents, sometimes printed as fair rental value, pays the rental income a Texas property loses while it is being repaired after a covered loss.

The coverage answers a narrow question. Fire, storm, or water damage that makes the unit unlivable triggers it; a tenant who stops paying, breaks a lease, or leaves early does not.

Three points decide whether the limit is right:

• The limit is usually stated as a percentage of the dwelling limit or as a number of months of rent
• The clock runs for the time the repairs should reasonably take, not for however long they end up taking
• The limit should reflect current rent, not the rent charged when the policy was first written

Landlords who raised rent and never raised the limit find the gap at claim time.

What a landlord policy does not cover

A landlord policy covers the owner’s building and the owner’s liability, which leaves the tenant’s side of the property uninsured.

Not covered by a Texas landlord policy:

• The tenant’s furniture, clothing, and electronics, which need the tenant’s own renters policy
• The tenant’s liability to anyone else
• Flood, which needs a National Flood Insurance Program policy
• Ordinary wear, tear, and maintenance the owner deferred
• Lost rent from a tenant who stops paying

Texas Property Code ch. 92 sets the landlord’s repair duties on a residential lease, and no insurance policy changes them. A lease can require the tenant to carry renters coverage and name the owner, which is the simplest way for a Texas landlord to close that gap.

Short-term rentals are underwritten differently

A short-term rental is a different risk from a long-term rental, and a standard landlord form is not written for it.

Guests turning over weekly instead of yearly changes the exposure: more people on the property, more slip and fall risk, more theft and damage, and a business income question rather than a rent question. Many dwelling forms exclude or restrict rental periods under a stated length.

Three things an underwriter asks about a Texas short-term rental:

• Average length of stay and how the property is listed
• Whether the owner or a management company handles guests and cleaning
• Whether a pool, hot tub, dock, or trampoline is on the property

Disclosing short-term use at application is not optional. An undisclosed short-term rental is the kind of misstatement that voids a claim.

What Aulona Insurance Group can place

Aulona Insurance Group places landlord coverage on Texas rental property, on the DP-1 and DP-3 forms.

Aulona Insurance Group places:

• Long-term rental houses and small residential rental property on DP-1 and DP-3
• Dwelling fire on seasonal, secondary, and between-tenant property
• Condo units that the owner rents out
• Coastal rental property, alongside the separate windstorm policy
• Flood through the National Flood Insurance Program and Write Your Own carriers
• Personal umbrella coverage above the landlord and auto liability limits

Luka Cenaj, the agency’s licensed principal, goes through occupancy, rent, and claim history on a recorded call before anything is quoted.

Where Aulona Insurance Group is not the right fit

Aulona Insurance Group cannot place every Texas rental property, and a landlord with a closing or a renewal date should hear the limits first.

Outside what Aulona Insurance Group places on rental property:

• Residential buildings of more than four units, which underwrite as commercial habitational property rather than on a dwelling form
• Long-vacant or heavily damaged rental property, which usually has to go to surplus lines, a market the agency cannot reach in-house

Short-term rental exposure sits between the two and is placed case by case. The call says whether the property fits the markets the agency holds, and it says so before an application is started.

What moves the price of a Texas landlord policy

The premium on a Texas landlord policy is set by the insurer, not by Aulona Insurance Group. Property is rated by location, and the county and the distance to the coast are the first inputs.

A landlord file is priced on:

• Whether the property is tenant-occupied, between tenants, seasonal, or vacant
• DP-1 or DP-3, and whether the dwelling settles at actual cash value or replacement cost
• The dwelling limit, set at rebuilding cost rather than at the purchase price or the rent roll
• Roof age and material, plus the age of the wiring and plumbing
• Claim history on the address, and the loss of rents limit selected

Aulona Insurance Group publishes no premium on this site and does not rank insurers by price.