Rental properties have seen an increase in popularity across the country over the last few years, and Texas is no exception. Whether you’re renting out your property in the long term (like a yearly lease) or the short term (such as homes listed on AirBnB), you’ll need to have the right insurance coverage in place to make sure you’re fully protected in case of damage or liability issues.
What companies offer landlord insurance in Texas?
Several insurance companies offer rental property insurance in Texas, including Farmers, State Farm, Allstate, and Obie. But coverage availability varies by ZIP code, so you’ll need to get a quote to know for sure which companies offer the landlord coverage you need.
Landlord insurance companies in Texas
Here are some of the most popular insurance companies offering landlord coverage in Texas in 2024:
2024 Policygenius award winner
Farmers
4.5
Offers extended replacement cost
Bundle home & auto
Smart home discounts
Why we chose it
Farmers is one of the best landlord insurance companies in Texas thanks to its wide array of coverage options, range of discounts, and high claims satisfaction scores.
Pros and cons
Pros
Multiple discounts to save on rates
Offers additional types of coverage for landlords, including workers compensation, loss control, and coverage against money and securities theft
Offers landlords access to SmartMove, which is a system that allows you to screen rental applicants through TransUnion and provides eviction information, criminal reports, and a credit report
Cons
Below-average scores on J.D. Power’s overall customer satisfaction and digital experience surveys
More details
Why we chose Farmers
Along with saving around 20% when you bundle two or more policies, Farmers also gives you access to its extensive suite of discounts, unique policy credits, and claim-free incentives that help put money back in your pocket.
Farmers also earned a high score in J.D. Power’s 2022 claims satisfaction study (though it scored below average on J.D. Power’s overall customer satisfaction and digital experience surveys). Plus, Farmers receives fewer complaints than average, according to the National Association of Insurance Commissioners.
How to get a quote
Online through Farmers
2024 Policygenius award winner
State Farm
4.8
Bundle home & auto
Offers extended replacement cost
All 50 states
Why we chose it
State Farm is one of the best overall rental insurance providers in Texas thanks to its statewide availability, large selection of policy options for most home types, high customer service marks, and industry-best financial stability ratings.
Pros and cons
Pros
Home alert discount for landlords who install specific home monitoring systems
Offers apartment insurance, designed specifically for apartment owners, and unique coverages for landlords, including tenant move-back coverage and heating or air conditioning loss reimbursement
High customer satisfaction and financial strength ratings
Cons
20% more complaints filed with the NAIC than other companies of its size
More details
Why we chose State Farm
At a time when lots of competitors are no longer insuring homes in areas prone to wildfires or hurricanes, State Farm continues to offer its relatively affordable and highly-rated home insurance to homeowners in most parts of the country, including Texas.
While some of its competitors may not have the financial strength to pay out claims after several natural disasters in the same year, State Farm isn't one of them. It earns the highest rating possible from A.M. Best for financial strength and stability — only six insurance companies out of nearly 70 we reviewed hold this title.
How do State Farm home insurance rates compare to the Texas average?
The average cost of State Farm home insurance in Texas is $2,743 per year, which is about 6% cheaper than the average annual premium in Texas of $2,919.
How to get a quote
Online through State Farm
2024 Policygenius award winner
Allstate
4.4
Bundle home & auto
Smart home discounts
All 50 states
Why we chose it
Allstate is one of the top-rated landlord insurance companies in Texas thanks to its relatively affordable rates, a wide range of discount options, exceptional customer service ratings, and several additional coverage options.
Pros and cons
Pros
High-quality and flexible policy options
Offers building code endorsement to cover increased costs due to bringing a building up to code after a covered loss
Online tool shows landlords the most common and most expensive claims in their ZIP code
Cons
Below-average digital experience rating with J.D. Power
More details
Why Allstate is our top pick for Airbnbs
If you rent out your property through a short-term rental service like Airbnb and a guest destroys or steals your property, Allstate’s HostAdvantage will pay up to $10,000 per rental host period to replace or repair your property.
And the best part? This coverage can be added directly onto your home insurance policy for a small additional fee. To put this into context, only about one-third of the nearly 70 home insurance companies we reviewed even offer home-sharing coverage at all.
What is the average cost of landlord insurance in Texas?
The average cost of landlord insurance in Texas is around $3,648 per year. We estimated this cost based on research from the Insurance Information Institute (III) and Policygenius rate data.
According to the III, the cost of landlord insurance is about 25% higher than the cost of a traditional homeowners insurance policy. [1] With the average cost of home insurance in Texas around $2,919 per year, our estimate puts landlord insurance in Texas just over $3,600 annually.
6 factors that affect the cost of landlord insurance in Texas
The average cost of rental property insurance in Texas is just that — an average. Some property owners will pay more than average for landlord insurance and others will pay less based on a number of factors, such as:
Size of your property: Renting out a 500-square-foot studio will come with lower insurance costs than renting out a 3,000-square-foot house.
Value of your property: How much your property is worth, which is partially based on things like materials, age, and upkeep, is a good indicator of how much you’ll pay for rental property insurance.
Crime levels: You’ll pay lower rates for landlord insurance if your property is in a low-crime neighborhood and higher rates if your property is in an area with more criminal activity.
Environmental factors: Properties located in areas that are prone to flooding, hurricanes, wildfires, or other natural disasters will be more expensive to insure.
Coverage level: How much coverage you purchase will have a direct impact on your premium, so expect to pay more if you choose to add on additional coverages to your policy.
Types of renters: You’ll likely pay less for landlord insurance if you have long-term tenants renting your property because they’re more invested in the regular maintenance and upkeep of it.
Landlord insurance discounts
Insurance companies typically offer discounts to lower the cost of landlord insurance, including:
Multi-policy: Bundling two or more types of insurance with the same insurer.
Claims-free: Going a minimum amount of time without filing a claim — typically three to five years.
Paperless: Signing up to receive statements and other notices electronically through email or text.
Pay-in-full: Paying your premiums in full at the start of your policy instead of quarterly or monthly.
Just remember that each company has their own unique approach to discounts. Those listed above are just a sample of what you might find with your own insurance company. Check with your insurance representative to make sure you're taking advantage of all possible discounts available to you.
Is landlord insurance required in Texas?
Texans are not required by law to have landlord insurance for their rental properties, but property owners who have a mortgage may be required by the terms of their loan to purchase insurance for their rentals. Whether or not insurance is required by law, experts recommend anyone who owns a home, apartment, condo, or other unit they’re renting out to other people to purchase landlord insurance to protect their investment.
What does landlord insurance cover in Texas?
Landlord insurance provides several types of coverage, including:
Dwelling coverage: Covers the structure of the home or building, including the floor, walls, and roof.
Other structures coverage: Covers other structures on the property, like a shed or garage, that aren’t attached to the dwelling itself.
Loss of rent coverage: Replaces lost rental income if your property can’t be used due to a covered peril. For example, if your rental house catches fire and the structure takes two months to rebuild, your insurer would pay you two months’ rent so you aren’t expected to pay for the lost rental income out of pocket.
Liability coverage: Pays for legal, medical, and repair bills if someone is injured or their property is damaged, and you’re found to be at fault. For example, if a dead tree on your property that you neglected to have chopped down fell on your neighbor’s car during a storm, your liability coverage would pay to repair or replace your neighbor’s vehicle.
Medical payments coverage: Pays for small medical bills, typically between $1,000 and $5,000, if someone is injured on your property, no matter who is at fault.
Landlord insurance also offers coverage for some types of personal property owned by the landlord that are for use in their rental property, like kitchen appliances, lawn mowers, and other equipment used to maintain the property.
What does landlord insurance not cover in Texas?
Because landlord insurance is only meant to protect the property owner, there are some types of coverage that are not included in a landlord insurance policy, such as:
Personal property coverage: This pays to repair or replace your personal belongings, like furniture and clothing, if they are damaged by a covered peril. Because a landlord policy is only meant to protect the property owned by the landlord, renters need to purchase separate renters insurance to protect their personal belongings.
Loss of use coverage: This coverage pays for renters to live somewhere else while their rental property is being repaired after a covered loss. A landlord insurance policy doesn’t cover these expenses because they’re incurred by the renter, not the landlord. Renters should purchase renters insurance to protect themselves from the costs associated with a temporary living situation after a covered loss.
Some extreme weather: No standard insurance policy covers earthquake or flooding There are also certain areas of Texas where windstorms (which are usually included in your coverage) may be excluded from your policy, requiring you to purchase a separate windstorm policy.
How to choose the best landlord insurance for you
There are a number of factors to consider when choosing the best landlord insurance policy for your needs, including:
Consider the type of property you own. The type of landlord insurance necessary for a single-family home is different from the type of coverage required for someone who owns an entire apartment complex or multiple office buildings. When it comes to choosing a landlord insurance policy, working with an insurance expert at Policygenius is a good way to make sure all of your needs are met.
Think about your coverage needs. There are lots of additional types of coverage that can be added to your policy for an additional fee, such as equipment breakdown, rental property under construction, building code, and vandalism coverage.
Compare options from multiple insurers. Every insurance company is unique, so each one will offer different rates and discounts, levels of protections, and additional benefits. Comparing quotes from multiple companies is the best way to ensure you have all of the coverage you need while paying the lowest possible rate.
Frequently asked questions
Do tenants need to purchase their own home insurance?
Yes, tenants are responsible for purchasing their own renters insurance policy to protect their personal belongings.
Do landlords need to pay for renters insurance?
No, landlords don’t need to pay for renters insurance; this is the responsibility of the tenant to purchase. Landlords only need to pay for rental property insurance that protects the physical structure of the property they're renting out, as well as their liability in case someone is injured or their property is damaged and you’re found legally responsible.
What is an HO-4 policy?
An HO-4 policy is a contents broad form policy, which is better known as renters insurance. Renters insurance covers your tenant’s belongings in case of damage or theft, but provides no coverage for the physical structure of your property.
