The honest answer to “what does landlord insurance cost in Texas” is that it depends, but the dependence is not mysterious. A landlord policy is priced off the same house a homeowners policy would be, then adjusted for the things that make a rental different: who lives there, what the roof is worth, how the deductible is written and how much liability sits behind it. Here are the levers, roughly in order of how much they move the premium, and the few that are worth paying for.
Start from the homeowners premium
The Insurance Information Institute has long put the gap at roughly 25 percent: a landlord policy on a given house generally costs about a quarter more than a homeowners policy on the same house. The reasons are structural. A tenant-occupied home produces more frequent and more expensive property claims than an owner-occupied one, because the person living there does not own the roof and tends to report problems later. The landlord policy also carries coverage a homeowners policy does not, chiefly the rental income it replaces after a loss. If you know what the house would cost to insure as a residence, you have a reasonable starting point.
From there, seven things move the number.
1. What the house would cost to rebuild
Coverage A, the dwelling limit, is the base the whole premium scales from, and it should be the cost to rebuild, not the market value and not the loan balance. Land does not burn and the lot’s value is not insured. A newer build in Round Rock or Frisco prices off a different rebuild number than a 1960s rental in Oak Cliff, even at similar sale prices, and getting this number right matters more than any discount.
2. The roof, and how the policy pays for it
Roofs are the dominant Texas property claim, so the roof drives more of the premium than any other feature of the house. Three things about it matter: its age, its material, and whether the policy pays for it at replacement cost or actual cash value. Many Texas policies now carry a roof schedule that moves an older roof to actual cash value automatically, and some exclude cosmetic hail damage. A recent roof, or an impact-resistant one, earns a lower rate with most carriers; an old composition roof on a replacement-cost policy is expensive because the carrier expects to buy it.
3. The wind and hail deductible
Texas policies typically carry a separate wind/hail deductible written as a percentage of the dwelling limit, with 1 and 2 percent the common choices. Moving from the lower to the higher percentage is one of the larger premium reductions available, and it is a reduction you pay back only in the year of a storm. The right choice is the largest deductible you could actually cover from reserves without touching the next mortgage payment. A deductible you cannot pay is not a saving.
4. Where the property is
Rates are set by territory, and Texas territories differ enormously. North Texas is priced for hail. The coast is priced for hurricane wind, and in the first tier of coastal counties wind may be written separately through the state windstorm pool at its own premium. Houston and much of Central Texas carry flood exposure that is not in the landlord policy at all and must be bought separately. Rural properties price for distance to a fire station. None of this is negotiable, but it does explain why the same house costs very different amounts to insure in Galveston, Dallas and Austin.
5. The policy form
A DP-1 is cheaper than a DP-3 because it covers a short list of perils and usually pays depreciated value. That gap is real on the invoice and much larger on the claim. Our guide to DP-1 versus DP-3 landlord policies in Texas explains why the cheapest form is usually the wrong one for an occupied rental.
6. Liability, and the umbrella above it
The liability limit on a landlord policy is a comparatively small part of the premium and a very large part of what the policy is for. Raising it is inexpensive relative to the exposure. Once there is more than one rental, or a rental plus a primary home plus cars, the efficient answer is usually a personal umbrella policy sitting above all of them rather than pushing each underlying limit as high as it will go.
7. Who lives there, and your own record
Tenant type and turnover matter: a long-term lease on a well-kept house prices differently from a constant-churn rental, and a furnished short-term rental is a different product altogether, covered in our article on insuring Airbnb and Vrbo properties. Vacancy beyond the policy’s allowance restricts coverage and needs an endorsement. Your own claims history follows you from property to property, and Texas permits carriers to use a credit-based insurance score in rating. Protective devices such as monitored alarms, and updated electrical, plumbing and HVAC on older homes, pull the other way.
Cheap to add, expensive to skip
A handful of coverages add little to the premium and a great deal to the outcome of a bad year:
- Loss of rents, sized to the actual rent for a realistic repair period. Six months of rent on a hail-and-interior-water claim is not unusual, and the mortgage does not pause.
- Water and sewer backup, which is excluded from the base policy and is a common rental claim.
- Ordinance or law, the coverage that pays for code upgrades when an older house is rebuilt to current requirements.
- A higher liability limit, for the reasons above.
How to lower it without gutting it
- Take the higher wind/hail deductible and hold the difference in reserve.
- Replace the roof on your schedule, not the storm’s. A new or impact-resistant roof lowers the rate and, more importantly, keeps the policy at replacement cost.
- Bundle. Landlord policies written alongside your home, auto and umbrella generally earn multi-policy credit, and a portfolio of rentals can often be scheduled together.
- Require renters insurance in the lease. It keeps tenant-caused losses off your loss history, which is what your future premiums are priced on, and it is standard practice in Texas.
- Re-quote at renewal when the rate moves. We write across many carriers, and the carrier that was right for a property three years ago is not always right for it today.
Why the cheapest quote is often the one to avoid
When three quotes come back and one is far below the others, the usual reason is that it is a DP-1, or it pays the roof at actual cash value, or it carries a liability limit chosen to make the number small, or loss of rents has been left off. Those are not discounts; they are coverage removed and billed as savings. The useful comparison is between policies that do the same job, and that comparison is what a quote conversation should produce.
The bottom line
Landlord insurance in Texas costs more than homeowners insurance on the same house, usually by about a quarter, and then moves with the roof, the deductible, the territory, the form and the liability behind it. Most of those levers are yours to set. If you would like an actual number rather than a framework, call us at (469) 513-3379 with the address, the year the roof went on and the monthly rent, and we will quote it the same day. You can also start from our Texas landlord insurance page.