Moon Insurance Managers, Inc. · TDI license #5595
Rental Property Insurance in Houston, TX
The day a tenant moves in, the policy on the house stops fitting it. A rental needs a policy written for a building somebody else lives in — one that insures the structure, the rent it produces, and your liability as the owner. It is a short story: two forms, one coverage most landlords have never been offered, and one thing no policy here covers.
- 41years in Houston
- 20+markets compared
- Same dayDPS filing
- #5595TDI license
Occupancy is the question
Why the policy on your house does not work once you rent it out
Every policy written for a home assumes one thing before it covers anything: that the owner lives there. Rent the house out — even the house you lived in yourself last year — and the assumption is no longer true. A policy that no longer matches the occupancy is a policy you find out about at the worst possible moment.
The market's answer is the dwelling policy: the DP form family, written for houses of one to four units that somebody other than the owner occupies. It insures the building rather than a household, it can carry the rental income, and it carries your liability as the owner.
Moving back into a house you have been renting out flips it the other way — that is a homeowners policy again, and our homeowners page is where that lives. Tell us either way. Changing the occupancy on a policy is a five-minute call and forgetting to is the expensive version.
Source: TDI — home insurance guide. Verified .
Two forms
DP-1 and DP-3 — the two ways a rental gets insured
Almost every quote you are offered on a rental house is one of two forms, and the difference is a single sentence of logic. A named-peril form pays for the causes of loss it lists. An open-peril form — TDI calls it all-risk — pays for everything it does not exclude. Either way the distinction decides what happens when something odd damages your building.
| Criterion | DP-1 | DP-3 |
|---|---|---|
| Causes of loss | Only the ones the policy names — fire and lightning at its core, with extensions available | Everything the policy does not exclude |
| The industry word | Named peril | Open peril |
| Usual settlement basis | Often actual cash value — depreciation comes off | Commonly replacement cost, though it is written either way |
| Loss of rents | Not assumed — ask for it by name | Normally part of the form; confirm the limit |
| Where the market puts it | Older properties, gaps in occupancy, leaner budgets | A property you intend to hold and re-let |
| What it is not | A cheap version of the same cover | A guarantee — the exclusions still decide |
Most landlords who plan to hold a property want the conversation to start at DP-3. When the market answers with DP-1 anyway, the useful question is not “why not the better form” but “what would have to change here for a carrier to offer it” — usually the roof, sometimes the vacancy pattern.
Source: TDI — home insurance glossary, named peril and all-risk. Verified .
Three coverages
Loss of rents is what makes it a landlord policy
The building is the obvious part. The other two are what separate this policy from the one you had when you lived there:
- Loss of rents Fair rental value
- If a covered loss makes the house unlivable, the mortgage does not pause while the repairs happen. This is the coverage that continues the rental income in the meantime — the landlord equivalent of what loss of use does on a policy for a home you live in. It is the piece to confirm is actually on the policy at the limit you need, rather than assume.
- Landlord liability The part the lease cares about
- A tenant or a guest injured on the property, and you held responsible for it. This is the coverage that responds, it is normally packaged with the dwelling policy, and a stated minimum limit is a common line in a Houston lease. Match the lease first, then ask what the next limit up costs.
- The building itself Dwelling and other structures
- The house, and usually the detached garage and the fence. Ask which basis it settles on: replacement cost rebuilds, actual cash value pays what a thirty-year-old roof was worth the day before the storm.
Loss of rents is the coverage landlords most often discover they never had. A kitchen fire that takes a house out of service for four months is not really a building problem for the owner — the building gets repaired. It is four months of no rent against twelve months of mortgage, taxes and insurance. Ask for the coverage by name, and ask what limit it is written at.
Not your policy's job
What about your tenant?
Your policy covers your building and your liability — never your tenant's belongings. That is their renters policy, and for most tenants it is one short call. Handing a tenant our number is genuinely the easy way to satisfy the insurance clause in your lease: that page sets out what a lease can and cannot require, so you do not have to. Requiring it in the lease is not charity either: a tenant with their own liability coverage is a tenant whose kitchen fire has somewhere to settle other than against your policy and your loss history.
Edges and hand-offs
Houston specifics, and where this page stops
Wind and hail
Wind and hail work the same way on a rental dwelling as on any Houston home policy — including the corridor east of SH 146, where a separate windstorm policy applies — and our homeowners page and windstorm page explain both.
Flood
No dwelling policy covers flood — that is a separate policy, explained on our flood insurance page. On a rental it is worth a second thought: a flooded building is months of lost rent no dwelling policy will replace.
Mobile and manufactured homes
Renting out a mobile or manufactured home? Those are quoted through different markets whoever occupies them — see mobile & manufactured home insurance.
Five units and up
Five or more units is a commercial policy, not this one — start at commercial property insurance and we will take it from there. The line is a market convention rather than a law, and carriers draw it in slightly different places, so a fourplex with a converted garage apartment is worth asking about rather than guessing at.
On the dwelling side we compare Foremost, Dual, Swyfft and the Texas FAIR Plan. Which of them will look at your property depends on its age, its condition and its claims history rather than on anything we can promise in advance — that is what makes it a phone call and not a form. The rest of the shelf is in our carrier directory.
No obligation
Get the rental covered properly
Tell us the property address, how many units, and who lives in it. That is enough to start — we will compare the dwelling markets and call you back with real options. The phone is fastest: (281) 484-8320. There is a longer quote request form if your declarations page is to hand, and the callback form above takes five fields.
Rental dwellings are written statewide. You do not have to be local; the house does.
Monday to Thursday, 9:00 to 5:00; Friday, 9:00 to 4:00. 360 FM 1959, Houston, TX 77034.
Landlord questions we get every week
Do I need landlord insurance for a house I am renting out?
If a tenant lives there and you do not, yes. A policy for a home you occupy is written around the assumption that you occupy it, and renting the house out breaks that assumption — which is a bad thing to discover at a claim. The right form is a dwelling policy written for tenant-occupied property.
What is the difference between DP-1 and DP-3?
DP-1 covers only the causes of loss it names. DP-3 covers everything it does not exclude. DP-3 is the broader of the two; DP-1 is sometimes what the market offers on an older or intermittently occupied property. Which one fits yours depends on the property and on what a carrier will write, so it is a short phone conversation rather than a form.
Does my policy cover my tenant’s belongings?
No — never, on any form. Your policy covers your building, your loss of rents and your liability as the owner. Your tenant needs their own renters policy for their things and their own liability. Hand them our number and we will take it from there.
I own a fourplex — is that still this policy?
Yes. One to four units is generally a personal-lines dwelling risk. At five units and up it becomes commercial habitational property — a different policy and a different set of markets, and our commercial property page is the starting point.
What about short-term rentals?
Airbnb-style use is its own underwriting question, and the honest answer is that it depends on how often and how the property is let. Tell us how it is actually being used and we will tell you what it needs.