Poolville, TX · Member since 2017 · 43 posts · 2 votes
My mother passed away and we are renting her house out. I just became aware that she had no insurance coverage. Do I need to get insurance if renting it out? Why is the insurance so expensive?
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
9y
Texas law does not require the property to be insured. However, I urge you to do so to protect your interest in the property. You should easily be able to find a policy for less than $50-75 per month depending on the value
Newport News, VA · Member since 2017 · 3 posts · 1 vote
9y
Yes, subject to state laws. Some insurance institutions have rental policies or Landlord policies, which protect the home itself, not the tenants belongings. I'm not an expert, but I believe having a standard homeowners insurance policy on a rental with tenants is actually not the appropriate policy and could actually nip you in the butt.
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
9y
Absolutely. You'll need to get a landlord policy on it, which is usually cheaper than a residence policy. You may want to make sure your renter has renter's insurance as well. Different policies cover different aspects.
Investor · Hillsboro, TX · Member since 2017 · 358 posts · 245 votes
9y
In Texas, I keep insurance on permanent site built structures. I just get a landlord's policy, I also have a clause in my lease that recommends them to purchase rental insurance. (I highlight that and make sure I go over it with them, before they sign.) I do not insure mobile homes, because the cost to me seems out of line for the return, (note: the few mobiles I have are older and I purchased them for the land and improvements, sometimes I think the acreage would be worth more without the mobile.)
Some states may require you to have insurance, so check in your state. The cost of insurance is usually reasonable on a rental. I new roof, a bad storm, or a fire can wipe you out otherwise.
I have a friend that has over 100 doors and he does not buy insurance, because he claims he is self insured. He claims he can buy another door or two for the insurance premium. This is the one thing that keeps him and I from being able to JV on properties. I like the peace of mind, he likes to keep the cash, just a different viewpoint.
Princeton, KS · Member since 2014 · 357 posts · 169 votes
9y
If there's a mortgage on the property, the mortgage-holder will likely have some say on what type of policy you need. If you have to file a claim, you may have it all backfire on you because of that.
I carry structure insurance on my properties - it doesn't cover as much as a typical homeowner's policy, but I don't need that. I feel my premiums are pretty reasonable, all told.
In this state, we cannot require tenants to carry renter's insurance - you might check. It can be "strongly suggested," however.
Every state, county & city has different regulations - it can be very confusing!
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
9y
Texas law does not require the property to be insured. However, I urge you to do so to protect your interest in the property. You should easily be able to find a policy for less than $50-75 per month depending on the value
I insure a property for either the dollar amount that it cost to build (unleveraged) or the principle balance (leveraged). I use to have liability extended from my personal policy to my rentals but was recently told that this wasn't actually legit, that they had made a mistake. Was pretty pissed that they led me to believe I was covered, but would have wiped their hands if something would have happened. I'm currently getting a quote on a $1M liability policy that will cover all the rentals.
Depending on the value you want to insure, you can get a dwelling-only policy for a rental as low as $577/year.
Poolville, TX · Member since 2017 · 43 posts · 2 votes
9y
Wow thank you for the advice. The house and property are all paid off and I inherited it along with the 20 acres it sits on and 5 homes on it as well when my mom passed. I live in one of the homes and my son lives in another. My moms brick home is the one rented out.
Investor · Pflugerville, TX · Member since 2014 · 152 posts · 94 votes
9y
I would carry a landlords policy since it is your only rental. If the house burns down you are out the income and you cannot sell it so would be a total loss. Make sure the landlord policy has a liability large enough to cover your personal assets in case you are ever sued. Sometimes it is cheaper, especially if you have multiple properties, to carry a large $1M umbrella policy that covers all of your properties. Just remember, the liability insurance only pays out as long as you did not do something illegally or if you did not knowingly allow a hazardous situation.