Mar 20, 2025
Texas Multifamily Insurance Guide 2025
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Owning multifamily property in Texas is rewarding, but it comes with complex risks: fire, wind/hail, liability from tenants and guests, crime, and costly code upgrades after a loss. Insurance isn’t just a lender requirement — it’s the backbone of asset protection.
This guide explains the coverages every multifamily owner should carry, the endorsements most overlook, and the underwriting details that determine whether you get competitive terms or inflated premiums.
“Insurance isn’t just a box to check for the bank — it’s what keeps your property cash-flowing after a storm or fire. Without the right structure, even one claim can knock you off course.”
Matt S.
112-Unit Apartment Owner - Dallas, TX
The Core Coverages Every Multifamily Owner Needs
Commercial Property Insurance — Covers buildings, roofs, HVAC, elevators, signage, and business personal property (clubhouse furniture, office equipment, fitness centers). Ensure replacement cost valuation is correct — not loan value or appraisal.
Business Income / Loss of Rents — Replaces rental income if units are untenantable after a covered loss. Limits should match 12–18 months of rental income, not just a short-term figure.
General Liability Insurance — Covers bodily injury and property damage claims from tenants, guests, and vendors. Slip-and-fall at the pool, injuries in stairwells, or playground accidents fall here.
Umbrella / Excess Liability — Adds higher limits. With pools, gyms, and heavy tenant traffic, lenders often require $10M+ in liability protection.
Workers Compensation (Voluntary in Texas) — Covers maintenance, groundskeeping, and leasing staff. Even though Texas doesn’t mandate WC, one employee injury can trigger costly lawsuits if coverage isn’t in place.
