Why your homeowner policy may not be enough
A standard homeowner policy (usually an HO-3 or, in Texas, often an HO-A or HO-B form) is written for a house the owner lives in. Many of these policies limit or exclude coverage when the home is rented to someone else, and some treat a change in occupancy you did not report as grounds to deny a claim. Every insurer words this differently, so the only safe answer comes from your own policy and your agent.
Call your agent before the first tenant moves in, say plainly that the home will be rented, and ask them to put the change in writing. Converting the policy after a loss is too late.
What a landlord or dwelling policy covers
Policies written for rented homes are usually called dwelling fire or landlord policies. In Texas the common forms are the TDP-1, TDP-2 and TDP-3, which run from basic named-peril coverage up to broader open-peril coverage on the structure. Whatever the form, compare quotes on these parts:
- Dwelling: the house and attached structures, ideally at replacement cost rather than actual cash value, with a limit that reflects today's rebuilding cost.
- Other structures: detached garages, fences and sheds.
- Landlord's personal property: appliances, blinds and anything else you own that stays in the home. Tenants' belongings are never covered here.
- Loss of rent (fair rental value): the rent you lose while a covered loss makes the home unlivable. Many basic forms leave this out or make it optional.
- Premises liability: defense and payment if someone is hurt because of a condition of the property. On some dwelling forms this is an add-on, not standard.
- Water damage: sudden discharge from plumbing and the cost to reach the leak. Read the limits on slab leaks and foundation access, which matter on San Antonio's many slab-built homes.
Texas risks to price in
Wind and hail drive a large share of Texas property claims. Many Texas policies carry a separate wind and hail deductible written as a percentage of the dwelling limit, not a flat dollar figure. Check the percentage and do the math against your dwelling limit so a hailstorm does not come with a surprise.
Flood is excluded from landlord policies just as it is from homeowner policies. If the home sits in or near a flood zone, or anywhere water collects in a heavy storm, price a separate flood policy. Federal flood policies normally have a waiting period before coverage starts, so buy it well before you need it.
Foundation movement from expansive clay soil is generally excluded as settling. Ask what the policy does cover, such as access to repair a plumbing leak under the slab.
Liability and an umbrella policy
A rental puts strangers on your property every day: tenants, their guests, vendors and delivery drivers. A broken step, a loose handrail or a pool gate that does not latch can lead to a claim against you as the owner. Keep the liability limit on the rental at a level that protects your other assets, and ask about a personal umbrella policy that sits over both your home and your rentals.
Good maintenance is part of the liability plan. Texas law requires working smoke alarms (Texas Property Code 92.255) and specific security devices such as door viewers and keyless deadbolts on exterior doors (92.151 and following). Documented inspections, prompt repairs and a written record of each one are the evidence that you kept the home safe.
Requiring renters insurance from the tenant
Your policy covers your building. It does nothing for the tenant's belongings, and it does not cover the tenant's personal liability. That gap becomes your problem quickly: a tenant who loses everything in a fire with no insurance may have nowhere to go and no way to pay for damage they caused.
A lease can require the tenant to carry renters insurance, set a minimum liability limit and ask that the landlord or manager be listed as an interested party, so the insurer gives notice if the policy lapses. When a tenant accidentally causes a kitchen fire, their liability coverage can respond to the damage, which may spare you a claim on your own policy. Coverage for accidental water damage, such as an overflowing tub, varies by policy.
Rothrock makes renters insurance a condition of every lease it manages and has the policy on file before the tenant gets keys. The renter's side of that requirement is explained in plain terms in our renters insurance guide, which you can share with applicants.
Your insurance checklist before a tenant moves in
- Tell your insurer in writing that the home will be rented, and get the right policy form in place.
- Confirm the dwelling limit and replacement cost basis.
- Add loss of rent coverage and check how many months it pays.
- Confirm premises liability and its limit; consider an umbrella policy.
- Know your wind and hail deductible as a dollar amount.
- Decide on flood coverage with the waiting period in mind.
- Add your property manager as an additional interest or additional insured if your insurer allows it, so they can work with the adjuster.
- Keep a copy of the declarations page with your rental records and set a renewal reminder.
- Require renters insurance in the lease and collect proof before move-in.
When there is a claim
Speed matters after a loss. Water that sits turns into mold, and an open roof lets more rain in. With Rothrock managing the home, the team secures the property, gets licensed vendors out for emergency mitigation, documents the damage with photos, coordinates with the tenant, and keeps the invoices and photos in your owner portal so you have what the adjuster asks for. You stay in charge of the claim itself and decide on the larger repairs.
Our quarterly inspections, with a photo report for each one, also help here. A dated photo of a roof, ceiling or water heater before a storm makes it much easier to show what changed after it.
Questions
Do I need landlord insurance if I rent out my house in Texas?
In practice, yes. Many homeowner policies limit or exclude coverage once the home is rented. Tell your insurer it will be a rental and get a landlord or dwelling policy that fits.
What is the difference between homeowners and landlord insurance?
A homeowner policy covers a home you live in, including your belongings and personal liability. A landlord policy covers a home you rent out: the structure, your liability as owner and, if you add it, lost rent. It does not cover the tenant's belongings.
Does landlord insurance cover lost rent?
Only if the policy includes loss of rent or fair rental value coverage, and only when the home is unlivable because of a covered loss. It does not pay when a tenant simply stops paying.
Can a Texas landlord require tenants to have renters insurance?
Yes. The lease can require it, set a minimum liability limit and ask that the landlord be listed as an interested party.
Does landlord insurance cover flood or foundation damage?
Generally no. Flood needs a separate policy, and foundation settling from soil movement is a common exclusion. Ask what is covered for plumbing leaks under the slab.
General information about Texas rules, not legal advice. For a specific situation, speak to a Texas attorney.