[USER]

Home – new construction
Area – Houston suburb, Texas (out of flood zone)
the insurance company is offering $155/month ($1861/year) on a 2900 sqft home.

Given it’s a new construction, do I need to take this insurance or can I go with a basic that includes fire and wind losses?

I will be renting out this property and not intend to get additional living expenses cov, and personal liability coverage as I don’t live on that property.

[Hope]

I live in Houston, also in a suburb, also outside of flood zones. Don’t skip the flood insurance, the flood zones don’t mean that much, and with new construction happening all the time in the suburbs, the flooding patterns change so you can’t base it off of “didn’t flood last time”.

[Meeta]

Unless it’s a paid property, you cannot skip insurance. It is required from your mortgage provider

[Brian]

You want to coverage that protects you as a landlord. This is different than regular homeowners insurance.

It is usually around the same cost as homeowners insurance, but covers different risks.

For example, what happens if somebody trips on the front stairs or sidewalk and sues you?

Or the tenant has a guest over who falls down the stairs

Taking a step back though, I think you have it backwards. The bulk of your insurance premium is going towards things like wind and natural disaster risk.

The liability portion of your policy, and even the fire portion of your policy, are very, very small in comparison because those are much smaller risks of loss versus weather related events.

if you want to keep your costs low, self-insure the weather related events and don’t skimp on liability or fire protection.

While the worst case for a weather related event, is you losing the home, a liability claim could be much higher than even the value of the home.

[Stacey]

Do you have a mortgage on the property?
If so, your lender will give you the minimum coverage you need to protect their financial interest in the property.

[Tammy]

New construction may impact a decision to buy a home warranty, but has nothing to do with insurance. If there is a loan, insurance is most likely required.

If there is no loan, you can choose to “self insure” property damage.

Flood insurance generally covers more than natural floods.

Many basic policies don’t cover any damage from rising water, which isn’t necessarily from flooding.

We had a drain blocked and I fortunately noticed just before water made it up to our back door.

Have a conversation with a reputable insurance agent to understand what is covered by the policies available vs what you’ll be paying out of pocket if you decide not to fully insure the property.

[Endri]

Doesn’t your mortgage force you to get insurance? Especially flood?

[Jule]

You must have the insurance label the property as a rental. Don’t skimp on this.

A friend of mine has a rented house that used to be her primary house.

Thankfully she did it right either way her insurance company as her tenant caused a fire which almost completely destroyed the house.

The insurance company is taking care of everything, including reimbursing her the rental income she is losing until the house can be renovated.

[Author]

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