Landlord Insurance in Texas: Costs, Requirements & Best Providers

Texas dwelling policies have their own names

Texas uses its own dwelling forms. Instead of DP-1, DP-2 and DP-3, you’ll often see TDP-1, TDP-2 and TDP-3. The TDP-3 is the open-perils form most landlords want, since it covers the building against any cause not specifically excluded. Read the form number on every quote so you’re comparing like with like.

Hail country: the deductible matters most

Dallas-Fort Worth, San Antonio, Austin and the Panhandle all see damaging hail most years. Many Texas policies carry a separate wind and hail deductible, written as a percentage of the dwelling limit:

Dwelling limit	1% deductible	2% deductible
$250,000	$2,500	$5,000
$400,000	$4,000	$8,000

Also check whether the roof is paid at replacement cost or actual cash value, and whether cosmetic damage is excluded. Loans sold to Fannie Mae generally cap the deductible at 5% of the dwelling limit.

The coast: TWIA and the FAIR Plan

On the Gulf Coast, from Brownsville to Beaumont, many private insurers exclude wind. The Texas Windstorm Insurance Association fills that gap in the 14 coastal counties and part of Harris County. That means two policies: TWIA for wind and hail, and a landlord policy for everything else. Away from the coast, if no private insurer will write you, the Texas FAIR Plan Association offers basic coverage.

Flood and freeze

Hurricane Harvey in 2017 flooded large parts of Houston, much of it outside mapped flood zones. Landlord policies exclude flood. Coverage comes from the National Flood Insurance Program or a private carrier, usually after a 30-day wait, so buying when a storm is in the Gulf is too late.

Winter Storm Uri in 2021 showed the other side: pipes in attics and exterior walls burst across the state. Insulate them, and keep vacant units heated.

What lenders require

Lenders want a landlord policy naming them as mortgagee, with dwelling coverage at least equal to the loan or rebuild cost and a deductible within their limits. On the coast, they’ll require proof of windstorm coverage. Flood insurance is mandatory on federally backed loans in a special flood hazard area.

Ways to cut the premium

1. Install Class 4 impact-resistant shingles and ask for the discount.
2. Get a windstorm inspection certificate for any coastal repair or re-roof so you stay TWIA-eligible.
3. Raise your deductible to the largest amount your reserves can cover after a hail storm.
4. Insure several rentals together. Obie offers portfolio policies with blanket limits.
5. Require renters insurance with liability coverage in every lease.

Texas deposit and security rules

Texas sets no deposit cap (Tex. Prop. Code §§ 92.101-92.109). You must refund the deposit or send an itemized list of deductions within 30 days after the tenant surrenders the unit, once you have a written forwarding address. Bad-faith retention can cost $100 plus three times the amount withheld and attorney fees. You also have to rekey locks within 7 days of each tenant turnover and provide required security devices, and skipping that creates liability your policy may not cover.