Landlord liability insurance in Texas

Short answer. Liability is not automatically part of a Texas landlord policy. The standard Texas Dwelling Policy Form 3 (TDP-3) has no liability section, though many landlord policies include premises liability anyway. Check your declarations page for a liability limit; if there is none, assume you are not covered until your agent or insurance company confirms otherwise.

Why a landlord policy may have no liability at all

A homeowners policy bundles two things: coverage for the house and personal liability. A dwelling policy, the kind usually written for a rental, does not have to.

The Texas Department of Insurance (TDI) has its own standard dwelling form, the TDP-3 (last revised in 2002). Insurers may still use it, but many now use their own approved forms (Ins. Code §2301.052), and surplus-lines insurers use theirs. We quote the TDP-3 because it is public. It covers the dwelling, personal property and some extensions such as loss of use, and it contains no bodily-injury or liability section (TDP-3). Some insurance companies include liability on their landlord policy anyway. Others add it with an endorsement (a form attached to the policy that adds or changes coverage), or expect you to buy a separate policy.

That is why the useful question is not "does a DP-3 include liability?" but "is liability on my policy, and at what limit?" A blank where a liability limit should be is a finding, not a formatting quirk.

Your old homeowners policy is not a safe fallback. TDI says "most homeowners insurance won't cover damage to a rental property, or it might limit what it pays for." Writing about renting a home to short-term visitors, it adds that homeowners insurance "probably won't cover the costs if someone else gets hurt or causes damage on your property" (TDI, Renting out your home?). A long-term rental has the same basic problem: a homeowners policy is written for a home you live in.

The pieces of landlord liability protection

TDI describes personal liability coverage as paying "medical bills, lost wages, and other costs for people that you're legally responsible for injuring," and paying "if you're responsible for damaging someone else's property" (TDI Home insurance guide). That description is written for homeowners policies, but it is the same idea on a landlord policy where liability is included.

An illustration (invented, not a real claim). A visitor to your tenant falls on an exterior stair that had been reported as loose, and sues for medical costs and lost income. Premises liability is the part of a policy aimed at that claim. A small urgent-care bill for a cut hand, by contrast, is the kind of thing medical payments is designed to settle quickly.

Texas landlord duties and insurance

Texas law gives landlords specific duties: repairs that affect health or safety, security devices, smoke alarms, and strict rules on lockouts (Property Code ch. 92). Insurance does not replace meeting them. A claim that one was broken may or may not be covered, and penalties set by law often are not. Ask an attorney about your obligations as a landlord.

Who the policy protects

The policy protects the named insured: the person or company the policy is issued to, shown on the declarations page. If an LLC owns the house, the LLC should be the named insured (for a trust, usually the trustee, in that capacity). A property manager is protected only if the policy says so, for example as an additional insured. See LLC rental property insurance in Texas.

Several policies do not simply add up

If you also carry a commercial liability policy, or a rental platform provides host liability, those do not automatically add together with your landlord policy into one larger total. Who each one insures, what it covers and its "other insurance" wording decide how they combine for a single claim. Three policies with the same limit do not automatically make three times that limit. For short stays, see Short-term rental insurance in Texas and the gaps to check.

How much liability insurance should a Texas landlord have?

TDI says an umbrella policy "would kick in after your auto or home insurance stops paying" and pays "up to at least $1 million" (TDI, Umbrella policies). Limits on a landlord policy are shown per occurrence (one incident) and sometimes in aggregate (the whole policy term); read both. No Texas rule sets a number for a landlord, and published "most landlords carry…" figures are not a good guide to your situation. Things worth weighing:

• what you own that a court award could reach;
• how many rentals you have, and whether any of them has a pool, outside stairs, or another feature that makes an injury more likely;
• what your lender, HOA, lease or business partners require;
• whether an umbrella makes sense. An umbrella insurer may require certain liability limits on the policies underneath it. A personal umbrella may also exclude rental properties, or not cover property owned by an LLC, so ask before you rely on one for a rental.

Asset-protection questions (for example, whether to hold rentals in an LLC) are legal questions. Ask an attorney as well as your agent.

A short checklist

• Is there a liability limit on the declarations page? What is it, per occurrence and in aggregate?
• Is medical payments included, and at what limit?
• Is personal injury (wrongful eviction or entry) available or included?
• Does the named insured match the owner on the deed?
• Is the property rented by the night or week? If so, does the insurance company know? See the short-term rental guide.
• If you carry an umbrella, does it cover this rental and sit above this policy's liability?

AIV Insurance is an independent insurance agency in Texas, not an insurance company: we don't issue policies or pay claims. If you would like to know whether liability is on your landlord policy, email your declarations page to us at hello@aivinsurance.com or reach us through the contact page, and we will walk through it with you before you choose anything. For the wider picture, read Texas landlord insurance: what a DP-3 covers.