Texas Landlord Insurance
Q. What Is Landlord Insurance?
A. Landlord insurance provides coverage for property owners that rent or lease out one or more residential homes, apartments, or condos. As a landlord, you need protection from financial loss that may result from damages to a rental property due to fire, break-in, severe weather and perils. You can get insurance to help cover your loss of income in the event that your rental property becomes uninhabitable due to circumstances beyond your control.
Q. Why Should I Carry Landlord Insurance?
A. Landlord insurance is important because it protects you from financial loss resulting from accidents, natural disasters, injuries and other liability issues associated with your rental property. It also provides reimbursement for loss of rental income and can cover any repairs or even the entire replacement of a rental property structure.
Q. What Does Landlord Insurance Cover?
A. Landlord insurance provides several important types of coverage. Depending on the coverage options that you choose, your policy may provide coverage for some or all of these types of issues:
Property damage: This covers damage to your building and personal property due to fire, storm damage, theft, vandalism and tenant damage. Ideally, your landlord insurance policy will cover the replacement costs for your entire rental property in the event of a total loss.
Liability insurance: Liability coverage protects you against liability claims and lawsuits should a tenant, visitor or even a trespasser be injured on your rental property. You can also be covered if you as the landlord are found responsible for another person’s property damage. For example, if you neglect to fix a leaking water pipe and mold damage destroys your tenant’s property, a liability claim could be filed against you by the tenant.
Loss of income: This coverage can reimburse you for lost income in the event that your rental property becomes uninhabitable due to a covered loss, such as a storm or a fire. Not all policies include loss of income coverage, so be sure and ask your agent to include it in your policy.
Q. Do I Have to Carry Landlord Insurance?
A. Some landlords rely on their homeowners insurance to cover their rental units. It is important to know that your homeowners policy most likely does not cover damage to your rental property.
Landlord insurance is not required by law, but you would be wise to carry it if you’re collecting rent and managing a property. Building fires, storms, tornadoes, vandalism and liability claims are some of the key things you want to be prepared for as a landlord.
Q. How Much Does Landlord Insurance Cost?
A. The cost of landlord insurance can vary considerably based on a number of factors including the type and amount of coverage that you are purchasing. Below are some examples of the variables that will ultimately determine the costs of insuring your rental property:
• Your property location and any known risks in the area.
• The size of the structure.
• How many rental units you have.
• The age and overall condition of the building.
• Whether your electrical wiring is up to current code.
• How many rental units you have.
• Whether your property has a swimming pool
• The type and amount of coverage you are purchasing.
• Whether you have fire sprinklers installed in your properties.
• Whether the complex has gated access.
• Whether you have burglar alarms installed.
Q. Is Landlord Insurance Tax Deductible?
A. Yes, you can deduct landlord insurance premiums you pay on your rental property. Being a landlord is a business endeavor and your landlord insurance can be considered a business expense.
Q. Can Landlords Require Tenants To Carry Renters Insurance?
A. Although there is no federal or state law requiring tenants to have renters insurance, as a landlord it is fully within your legal rights to require this as part of the rental agreement as long as this requirement applies to all of your tenants. A landlord can also require that a tenant have a specific amount of insurance, provide proof of coverage and require that the tenant maintain the policy for the duration of a lease.