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Rental Insurance in the Lone Star State. What You Need to Know About Rental Insurance In Texas

When deciding to rent in Texas, the first thing you may have come across is the fact that renters insurance in Texas is not required by law. Though some landlords require it based on their contracts, it is not universally required by the state. Now you’re wondering if getting renters insurance anyway is worth the cost.

What is renters insurance? How much will it cost? Why would someone need it? Read on to understand the importance of renters insurance in protecting your important possessions, your safety, and your renters contract. We’ll explain what renters insurance is, why you need it, and where you can find some policies that offer dependable and flexible insurance premiums for renters in Texas.

Rental insurance in Texas – the low-down

Renters insurance is not required by law in Texas, but a landlord’s insurance policy won’t cover any personal property that gets damaged or stolen while you’re staying in their building. Those policies cover their assets. Renters insurance is what you need to cover yours.

Renters insurance does more than protect property in the event of an accident, fire, infestation, or burglary, though this is a big reason to have a policy. Your damaged or stolen personal property won’t be reimbursed through a landlord’s insurance. However, renters insurance also covers your living expenses in situations where your rental space becomes unlivable.

For instance, in the case of a mold or pest infestation that needs to be dealt with or fire damage that renders a property unlivable for a certain period, renters are still contracted on their lease but have nowhere to stay. Renters insurance covers their living expenses while their rental property is being fumigated or repaired.

Renters insurance covers both foreseeable and unforeseeable circumstances in your future. It can cover damaged property but can also be a safety net in case you have to temporarily move or vacate your rental property.

What does renters insurance cost in Texas?

Before researching how much renters insurance costs, you need to think about how much you need. That all depends on the value of your property.

If you can calculate the value of your possessions, you have a number to compare to your monthly budget. This helps put your quoted rates into context when you start shopping around. The average for renters insurance policies in Texas is $22 per month, according to Benzinga. For that, policies with some of the top insurance companies can offer a few thousand dollars’ worth of property and personal liability coverage.

The companies that should have your attention should be American Family, Allstate, and Liberty Mutual.

There are different types of coverages, however. Even though we’ve narrowed down the company list, it pays to know what companies mean by property, personal liability, and loss-of-use coverage, as well as the average deductible you can expect from a normal policy.

Three types of coverage

Personal property coverage pays for replacement or repairs on anything that you own – this even includes coverage on luggage that you take with you on vacation. Personal liability coverage covers you or someone else for injuries they sustain in your home. If they decide to sue you for negligence over these injuries, liability coverage pays these fees as well.

Finally, loss of use coverage is the insurance term for covering your living expenses, including rent and food, for when you have to live somewhere else due to infestations or repairs, as we mentioned earlier. Knowing the value of all three of these policy items to you and your family will help you determine what kind of renters insurance policy you need.

For instance, a normal renters insurance policy offers an average of $30,000 of personal property coverage, $100,000 of personal liability coverage, and loss-of-use coverage that averages around 40% of your property’s value.

Deductibles exist for renters insurance just like they do for health insurance policies. In this case, the deductible amount will be subtracted from whatever the insurance company pays out for damages, injuries, or loss of use. Cheaper policies often come with higher deductibles.

Here are some other questions you may have about renters insurance in Texas:

Are there other coverage options available?

Yes, you can pay extra to get replacement cost coverage on your belongings rather than actual cash value coverage.

Cash value coverage only pays out the value of the items in cash on the current market. For instance, if someone breaks in and destroys furniture, the insurance company will pay you back for your old used furniture, not for the cost of replacing it with something new. That’s where replacement cost coverage comes in.

With replacement cost coverage, your renters insurance policy will reimburse you for the cost of buying the stolen or damaged items again, rather than simply their current value. It costs extra to have this coverage, but it can be worth it.

Am I covered for natural disasters?

Most renters insurance policies do not automatically include disaster coverage for things like earthquakes, hurricanes, or floods. If you’re concerned about these risks in your area, you may want to pay extra for the coverage.

When should I make a claim?

According to the Texas Department of Insurance, you should start the claims process as soon as possible. Most of the top insurance companies have deadlines that need to be met.

The Takeaway

Renters insurance is not required by law in Texas, but it benefits renters by giving them a safety net in several trying situations. Stolen or damaged property is covered by personal property coverage, injuries sustained in the home are covered by liability insurance, and the cost of living somewhere else if something happens to the rental property is covered by loss of use insurance.

Texas has a high average for renters insurance premiums – around $22 per month. However, now that you know why you need renters insurance, shop from the most reputable companies to find policies that benefit you and your family, no matter what happens.

Resources

https://www.tdi.texas.gov/pubs/consumer/cb043.html

https://www.benzinga.com/money/texas-renters-insurance/

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