Landlord insurance in Texas costs less than most owners expect, but the policy behind the price matters more than the price itself. This guide covers what a Texas landlord policy costs in 2026, what a dwelling fire policy actually pays for, what it excludes, and where short-term rentals break the standard coverage model.
What a landlord policy actually is
Insurers do not sell a product called “landlord insurance.” The policy you buy is a dwelling fire policy, written on one of three standard forms: DP-1, DP-2, or DP-3. The form number tells you how broad the coverage is. DP-1 is the narrowest and DP-3 is the broadest.
A dwelling fire policy insures the structure, not the household. It covers the building, other structures like a detached garage or fence, the owner’s liability for injuries on the property, and, on better policies, the rent you lose while the home is repaired after a covered loss. It does not cover the tenant’s belongings. Tenants insure their own property through renters insurance, and a smart lease requires them to carry it.
What landlord insurance costs in Texas
Two industry sources put current Texas pricing in the same range. Insurance.com reports that landlord insurance in Texas averages $1,584 per year, based on dwelling fire policies with $300,000 to $400,000 in dwelling coverage. Steadily, an insurer that writes landlord policies nationally, reports a Texas median of about $1,714 per year and notes that Texas sits among the higher-cost states.
Your own quote can land well outside that range. The main drivers are the ones that drive any Texas property policy: replacement cost of the structure, roof age and material, distance to the coast, hail history in the county, claims history on the property, and the deductible you choose. Wind and hail deductibles in Texas are usually a percentage of the dwelling limit rather than a flat dollar amount, and that choice moves the premium more than most others.
How that compares with homeowners insurance
The comparison surprises people, so it is worth being precise about what is being compared.
The Insurance Information Institute states that landlord policies generally cost about 25 percent more than a standard homeowners policy. That comparison assumes the same house, insured for the same value, with the owner moving out and a tenant moving in. The surcharge exists because insurers see tenant-occupied homes as higher risk. Tenants report problems later, maintain the home less carefully, and file liability claims more often.
Published state averages tell a different story because they measure different things. Insure.com puts the average Texas homeowners premium at $3,908 per year for a policy with $300,000 in dwelling coverage, $100,000 in liability, and a $1,000 deductible, against a national average of $2,543. That figure is far above the $1,584 landlord average from Insurance.com. The gap does not mean landlord coverage is cheaper for the same house. A homeowners policy bundles large amounts of personal property and additional living expense coverage that a dwelling fire policy simply does not include, and the two averages come from different surveys with different assumptions. For the same structure and the same limits, expect the landlord version to cost more, in line with the Insurance Information Institute figure.
DP-1 versus DP-3
The form you choose decides what a claim pays. The differences fall into three areas: which perils are covered, how the payout is calculated, and whether lost rent is covered.
| Feature | DP-1 | DP-3 |
|---|---|---|
| Perils covered | Named perils only, a short list such as fire and lightning | Open peril, everything except the listed exclusions |
| Claim payout | Actual cash value, depreciation deducted | Replacement cost on the dwelling |
| Loss of rents | Rarely included | Commonly included or available |
| Typical use | Vacant homes, low-value properties | Occupied long-term rentals |
A DP-1 pays actual cash value, which means the insurer deducts depreciation. A 15-year-old roof destroyed by hail pays out at its depreciated value, not the cost of a new roof. A DP-3 pays replacement cost on the dwelling and covers any peril the policy does not specifically exclude. For an occupied rental you intend to keep renting, DP-3 is the standard recommendation across the industry, and the loss of rents coverage alone usually justifies the difference in premium.
Loss of rents deserves emphasis. If a fire makes the home unlivable for six months, the mortgage payment does not pause. Loss of rents coverage replaces the rental income for the repair period after a covered loss. The Insurance Information Institute notes that most landlord policies include this coverage. Confirm the limit, because insurers cap it either in months or as a percentage of the dwelling limit.
What a landlord policy does not cover
Every dwelling fire policy carries exclusions, and three of them generate the most disputed claims.
Tenant-caused damage splits by cause. Accidental damage from a covered peril is covered. Wear and tear, pet damage, and gradual deterioration are not, on any form. Intentional damage by a tenant, such as vandalism on the way out after an eviction, is excluded on many policies unless it is specifically added. If that risk worries you, ask the agent to show you the vandalism and malicious mischief language before you bind.
Flood is excluded, the same as on homeowners policies. Texas rentals in flood-prone counties need a separate flood policy through the National Flood Insurance Program or a private flood insurer.
The tenant’s personal property is excluded. This is not a gap in your policy. It is the reason to require renters insurance in the lease.
Short-term rentals change everything
A landlord policy assumes a long-term lease with a screened tenant. A short-term rental operates closer to a hotel, with a new occupant every few nights, and insurers treat that as a business activity.
The Insurance Information Institute draws the line clearly. An owner who rents a home occasionally may be able to keep standard coverage with notice to the insurer, and some insurers will require an endorsement or rider. An owner who rents short term on a regular basis is running a business, and standard policies do not cover business activity. That owner needs a specialty short-term rental policy or commercial coverage written for the exposure.
The practical rule for a Texas owner listing on Airbnb or Vrbo: do not rely on a DP-3, and do not rely on the platform’s host protection program as a substitute for insurance. Tell the insurer exactly how the property is used and buy the policy written for that use. A claim denied for material misrepresentation of occupancy costs far more than the premium difference.
How to keep the premium down
Texas premiums are driven mostly by wind and hail risk, so the levers that work are physical and structural. Raise the wind and hail deductible if the cash reserve can absorb it. Replace a roof nearing end of life before renewal, and ask about impact-resistant shingle credits. Bundle multiple rentals with one carrier. Ask about credits for monitored alarms, water leak sensors, and newer plumbing, electrical, and HVAC systems. And get quotes from more than one insurer, because landlord pricing varies widely between carriers for the same property.
The bottom line
A Texas landlord should expect to pay roughly $1,584 to $1,714 per year for a typical single-family rental, based on 2026 figures from Insurance.com and Steadily, with wide variation by county, roof, and deductible. Buy a DP-3 form for an occupied long-term rental, confirm loss of rents is included with an adequate limit, read the tenant damage and vandalism language, require renters insurance in the lease, and buy separate coverage for flood or short-term rental use. The cheapest policy that fails at claim time is the most expensive policy you can own.