Trouble finding Houston (TX) Rental Property Insurance

18 Replies

Hi, I recently converted my mom's old house into a rental property in Houston TX (Harris county and it’s somewhat near the gulf). However, I'm having a really hard time finding home insurance. The only quote I was able to get was from the Texas Fair Plan. But this plan does not offer any liability coverage; I was wondering if anyone else had or are having similar problem. If so, what options are you considering or go with. I'm pretty new at this landlord and never had issues finding insurance for my primary residence. I really appreciate all the knowledgeable folks here at BiggerPockets and can use any advice for a rookie.

Thanks in advance for any advice

What has the feedback from the agent's you've talked been? Have they given a reason why they won't insure it? Proximity to coast, Age, your past claims history etc?

Here's some companies others on BP have recommended to me for non-owner occupied property insurance, although I've yet to contact them:

.http://www.nreinsurance.com/ National Real Estate Insurance Group

.Asset protection in Castroville, TX. (Lisa Goodner) 877-752-2742

.Benchmark Insurance Group at www.insuretxonline.com

.Safeco and Foremost are two companies that write landlord policies.

.I use Allstate on my rentals in Indiana, so I'd give them a call too.

Good luck!

The house is like most houses on the street, built in the 60s. Mainly the agent told was that most insurance companies think its too much risk to issue new policies.

Thanks Sharon, I'll give those companies a call.

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@Peter Logan  , curious who you ended up going with.  I've been calling around for the last week or so trying to get a decent rate on a policy for a property in Harris County as well.  Some companies won't insure because of its proximity the coast/storm risk and others have provided quotes between $1,800 and $3,000.  Yikes.

Tag.

I'm in Houston and being new to this, I haven't considered it yet. 

Looking forward to what others have to say....

Give Spearhead Insurance a try.  They are investor friendly and have outstanding service. But like Shawn said, there must be a reason why companies are reluctant to insure the house.  I would try to find out what that reason is.

@Peter Logan  I have a few very good and reliable insurance companies here in Houston, I would be happy to make an email intro with you and them. If you would like send me a PM an I would be happy to help you out.

You can go with Fair Plan and get a separate liability policy.  That is what I have done so far.  It seems to be the least expensive way to get "full coverage".  BP community, if there are risks to doing it this way, please tell me.  I have only made one insurance claim in my entire life so I have very little experience.

@Emily Powell  , I am looking into this, too. I have heard that most landlords are insured through Texas Fair Plan (run by the State of Texas).  They do not offer landlord liability insurance, so you'd have to purchase that separately, like @Waylon Themer   said. Here is what I found online today:

From texasfairplan.org:

"As a market of last resort, coverage available through the FAIR Plan is not as comprehensive as coverage available through the voluntary market. The FAIR Plan does not compete with the private market and applicants must have two declinations from other insurers in order to obtain coverage with the FAIR Plan. Applicants are not eligible for coverage with the FAIR Plan if they have a current homeowners or other residential property policy, renewal offer, or a binding quote from an authorized insurance company.

Although the FAIR Plan is considered a market of last resort, applications submitted for coverage are subject to underwriting guidelines for characteristics of ownership, condition, occupancy, maintenance, and liability exposure. Properties owned/deeded in the name of a business (corporation, partnership, association, LLP, LLC, etc.) are not eligible for coverage with the FAIR Plan. Vacant/unoccupied properties are also not eligible for coverage with the FAIR Plan."

From a forum:

"As a homeowner there is really not anything to worry about they are a good company. As an agent they need to be turned down 2 times by other companies (as stated above). However, the commissions are very good for the agents so a lot of them want to cheat the system."

From same forum thread:

"We had them for our rental property in Houston since my normal agent (State Farm or Farmers, dont remember which) did not do rental properties.
A few years later the place burned down and TX Fair Plan paid the claim, + rental income loss."

I think it's possible that many insurers don't offer coverage for rental policies, so maybe the agent submits applications to those he knows will decline coverage then legally applies for coverage through Texas Fair Plan.  If anyone here knows how that works, I'd be interested to understand more.

Another thing I read on the Texas Dept of Insurance website is that Fair Plan can't be used for vacant properties, so I don't know how that works when you are rehabbing the property.

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I ended up going with NREIG so I was able to get everything together without separate policies.  

I went with Texas Fair Plan, the cost seem reasonable. The only draw back is no liability coverage.

@Emily Powell   Just curious to know,  how much did the NREIG policy finally end up of costing? 

About $1,100/year for Special (DP-3) w/Named Storm coverage, $85K ACV and 6 months loss of rent.  I'm not confident about the choice to do ACV vs RCV but when I made that choice, I was more concerned about monthly cash flow.  Penny wise, pound foolish, perhaps.  But with them, my understanding is that you can change coverage from month to month, so if I decide to increase the coverage, I can do so at any time.  

I used Texas Fair Plan, my primary insurance company Farmers added a rider for rental to my existing plan for liability.

I know this thread is a little old but I have a few homes in the Houston Area and I'm currently re-evaluating my insurance on my properties. How does Named Storm coverage works? So if you don't have it and you get damage from a hurricane, you can't claim damage? Do you all have it?

@Emily Powell how has your experience been with NREIG? Thinking of switching to them.

@Steve Rozenberg Hi Steve, please PM me your recommendations for an insurance company for rental property. Thanks!

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