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What Is Landlord Insurance and Do I Need It?

Patrick Kevin Fagan Patrick Kevin Fagan Updated August 18, 2026

Landlord insurance (also called dwelling fire or DP-3 policy) protects rental property owners against property damage, liability, and lost rental income. Standard homeowner's insurance doesn't cover rental properties. Landlord insurance costs 15-25% more than homeowner's insurance but is essential if you own rental property. It covers the structure, landlord liability, and loss of rent.

What Landlord Insurance Covers (Structure, Liability, Lost Rent)

Landlord insurance typically covers the building structure, your liability if someone is injured on the property, and loss of rental income if the property becomes uninhabitable due to a covered loss. Some policies also cover appliances, fixtures, and improvements you've made.

What It Doesn't Cover (Tenant Belongings — They Need Renter's Insurance)

Landlord insurance does not cover the tenant's personal belongings. Require your tenants to carry renter's insurance to protect their own property and provide liability coverage. This is standard practice and protects both you and the tenant.

Cost Comparison (Landlord vs Homeowner)

Landlord insurance costs about 15-25% more than a standard homeowner's policy on the same property. The exact cost depends on the property value, location, age, and coverage limits. In Texas, expect to pay $1,500-$3,000 per year for a typical single-family rental.

How to Get It (Specialty Insurers, Independent Agents)

Shop for landlord insurance through independent agents who specialize in rental property coverage. Companies like Farmers, State Farm, Allstate, and specialty insurers like Foremost or American Modern offer landlord policies. Compare coverage limits and deductibles.

Renter's Insurance Requirement (Require Tenants to Carry It)

Make renter's insurance a requirement in your lease agreement. Require proof of coverage before move-in and at each renewal. Renter's insurance is inexpensive ($15-30/month) but protects both the tenant and you from liability claims.

Patrick's Take

"Never rent a property without landlord insurance. Standard homeowner's insurance will deny a claim if they find out the property is rented. I require all my tenants to carry renter's insurance too — it protects their belongings and reduces my liability."
PF
Patrick Kevin Fagan
Patrick Kevin Fagan

Patrick Kevin Fagan

Loan Officer and Realtor · AXEN Realty LLC

Patrick Kevin Fagan is a dual-licensed real estate agent and mortgage loan originator with over 23 years of experience helping buyers throughout Texas. He specializes in first-time homebuyer education and loan strategy.

Protect Your Rental Property

Patrick can help you find the right landlord insurance coverage for your Texas rental property.

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