Apartment & Multifamily Insurance in Texas: Guide

Key Takeaways

Apartments are still among the most closely underwritten properties in Texas, so a complete, well-documented submission often decides how many carriers will quote.
Many apartment liability policies limit or exclude assault, battery and firearm claims; read those exclusions before you buy, not after a claim.
Water and freeze losses are common, and many policies now carry a separate, higher water damage deductible.
Agency lenders publish detailed insurance rules. Fannie Mae's guide (checked October 2026), for example, caps all-other-perils deductibles on a policy with its own limit at $50,000 or $100,000, depending on insurable value.
An NFIP policy for a building with five or more units tops out at $500,000 for the building and $100,000 for contents, and it does not pay lost rent.

On This Page

Why Are Texas Apartments Underwritten So Closely?
What Coverage Does an Apartment Complex Need?
What Liability Exclusions Should Apartment Owners Look For?
How Do Water Damage and Freeze Claims Affect Apartments?
How Much Loss of Rents Coverage Do You Need?
What Do Agency Lenders Require?
Should You Require Residents to Carry Renters Insurance?
Do Texas Apartments Need Flood Insurance?
How Do You Present a Better Apartment Submission?

Why Are Texas Apartments Underwritten So Closely?

Because carriers have paid large weather, freeze and liability losses on Texas apartments. The wider commercial property market eased in 2026, but habitational business is still selective.

In plain terms, underwriting is how a carrier decides whether to offer coverage and at what price. For apartments, underwriters usually look closely at:

Year built, and updates to roofs, wiring, plumbing and HVAC.
Roof age and condition across every building.
Occupancy, and whether the property focuses on students, seniors or short-term stays.
Who manages the property and how long they have.
Security measures, lighting and the property's incident history.
Five years of loss runs and what changed after each claim.

Our apartments and multifamily page gives a short overview. This guide goes deeper on the parts that most often surprise owners.

What Coverage Does an Apartment Complex Need?

The core program is building property, loss of rents, general liability and an umbrella. Equipment breakdown, ordinance or law, crime and flood fill the common gaps.

Common coverages for Texas apartments. Each policy's wording controls.
Coverage	What it pays for	Typical trigger
Building property at replacement cost	Repairing or rebuilding your buildings	A unit fire spreads to the attic
Loss of rents	Rent you lose while units are repaired	Twelve units are down after a fire
General liability	Injury and damage claims from residents and visitors, and legal defense	A visitor falls on a broken stair
Umbrella / excess	Liability above the primary limit	A serious injury verdict
Equipment breakdown	Sudden failure of boilers, HVAC, elevators and electrical gear	A central boiler fails
Ordinance or law	Code upgrades and demolition after a loss	An older building must meet current code after a fire
Crime	Stolen rent and deposits	A staff member diverts rent payments
Flood	Flood damage, which property policies exclude	Heavy rain floods ground-floor units

Your policy covers your buildings and your liability. It does not cover your residents' belongings. That is the job of their own renters insurance.

What Liability Exclusions Should Apartment Owners Look For?

Look first for exclusions or low limits on assault and battery, firearms and habitability claims. Many apartment liability policies now include at least one, and the wording varies a lot between quotes.

Assault and battery. Some policies exclude these claims fully. Others cover them with a lower sublimit, such as $100,000 inside a $1,000,000 policy.
Firearms. Some policies exclude injuries involving guns, no matter who fired them.
Habitability. Some policies exclude claims that a unit wasn't fit to live in, such as mold or pest complaints.
Animals, abuse and other specific exclusions. Read the endorsement list, not just the limits.

Why this matters: Texas law says a property owner who controls the premises has a duty to use ordinary care to protect invitees from foreseeable criminal acts by others. Courts look at the history of similar crimes on or near the property, including how close, how recent, how frequent and how publicized they were (Fifth Circuit summary of Texas law). These negligent security claims can be large, and an exclusion can leave you paying your own defense.

Example (Hypothetical): Two Quotes, One Difference

Quote A costs $8,000 less a year than Quote B. Quote A excludes all assault and battery claims. Quote B covers them up to $250,000. A resident is assaulted in the parking lot and sues, claiming poor lighting. Under Quote A, the owner may have no defense paid at all. Under Quote B, the insurer would generally defend, subject to the policy terms, and pay covered damages up to the $250,000 sublimit.

Texas also requires landlords to provide certain security devices (Prop. Code §92.153). They include window latches, plus a keyed deadbolt or doorknob lock, a keyless bolting device and a door viewer on exterior doors. Keeping them working is both a legal duty and good underwriting. For legal questions, talk to an attorney.

How Do Water Damage and Freeze Claims Affect Apartments?

Water from inside the building is one of the most common apartment claims, and a hard freeze can cause many at once. Many policies now use a separate, higher deductible for water damage.

Winter Storm Uri showed the size of the risk. The Texas Department of Insurance's data call covered February 11 to 19, 2021. Commercial property was about 10% of the claims but about 53% of the incurred losses. The average incurred loss per commercial claim was about $149,000, as of March 2022 (TDI).

Check how your water deductible applies. It may apply per occurrence, per building or per unit. During a freeze, dozens of separate pipe breaks could each count, depending on the wording.

Example (Hypothetical): A Freeze With a Per-Unit Deductible

A cold snap bursts pipes in 20 units. The policy has a $10,000 water damage deductible that applies to each unit. Damage averages $18,000 per unit. The owner pays $200,000 in deductibles and the policy pays $160,000. Under a $25,000 per-occurrence deductible instead, the owner would pay $25,000 and the policy $335,000.

Underwriters like to see a written freeze plan. It should cover insulated pipes in exposed spaces, heat in vacant units, known shutoff locations and staff on call. Water leak sensors and automatic shutoff valves can help, too. Our Texas property risk page covers freeze damage in more detail.

How Much Loss of Rents Coverage Do You Need?

Enough to replace the rent you would lose from the damaged units for as long as repairs and re-leasing would take. Base it on your current rent roll, not last year's.

Example (Hypothetical): Sizing Loss of Rents

A 120-unit property collects an average of $1,200 per unit, or $144,000 a month. A fire damages one 24-unit building, and repairs are expected to take ten months. That building's rent is $28,800 a month, so the loss is about $288,000, plus any time to re-lease units. A larger loss, like a severe hailstorm with roof damage across all buildings, can stop more rent for longer.

The period of restoration is the time the policy pays rent, and it normally ends when units should be repaired. An extended period of indemnity can add time for lease-up. Your lender may also require a set amount of rent coverage.

What Do Agency Lenders Require?

Fannie Mae, Freddie Mac and HUD loans each come with detailed insurance requirements. They set minimum coverages, maximum deductibles and the lender wording your policy must carry. Your loan documents and your servicer have the final word.

As an example, Fannie Mae's Multifamily Guide (Section 501.02B, checked October 2026) sets these maximum property deductibles for a policy with its own limit:

Simplified from Fannie Mae Multifamily Guide §501.02B. Blanket policies, expanded deductibles and flood have separate rules. Check the current Guide and your loan documents.
Peril	Maximum deductible (Fannie Mae Multifamily Guide)
All other perils, insurable value under $10 million	$50,000 per occurrence
All other perils, insurable value $10 million or more	$100,000 per occurrence
Wind and hail not tied to a catastrophic peril	5% of total insurable value; if stated only in dollars, $50,000 (under $10 million) or $100,000 ($10 million or more)
Named storm and earthquake	7.5% of total insurable value

The same Guide has sections on business income including rental value, ordinance or law, equipment breakdown, crime, flood and liability (Fannie Mae). Freddie Mac and HUD publish their own rules, which can differ. Before you raise a deductible to save premium, check it against your lender's caps. Our deductibles guide explains how each type works. See agency lender insurance requirements for more.

Should You Require Residents to Carry Renters Insurance?

Many owners do, and it usually helps. Your policy doesn't cover residents' belongings, and a resident's renters policy may pay for damage they accidentally cause to your building.

Fewer disputes. After a fire or leak, residents with their own coverage are less likely to look to you for their losses.
Resident liability. Many renters policies include liability coverage that may respond when a resident's kitchen fire damages other units. Your insurer may also pursue the at-fault resident through subrogation.
Lease wording matters. Decide the required liability limit, whether you are listed as an interested party, and how you'll check compliance.

The lease is a legal document. Have a Texas attorney review any insurance requirement you add to it.

Do Texas Apartments Need Flood Insurance?

Often, yes. Standard property policies exclude flood, and lenders generally require flood coverage for buildings in high-risk flood zones. Many Texas apartments outside mapped zones also flood in heavy rain.

The NFIP limits for a residential building with five or more units (not a condo) are $500,000 for the building and $100,000 for contents (FEMA). Keep these points in mind:

Each NFIP policy covers one building, so a 12-building property needs 12 policies.
The NFIP General Property Form, used for these buildings, pays the building and contents at actual cash value and doesn't pay for lost income or loss of use (FEMA).
New policies usually have a 30-day waiting period, with exceptions when tied to a loan (FloodSmart).
Excess flood or private flood can add higher limits or rent coverage.

How Do You Present a Better Apartment Submission?

Show underwriters the property as it is today, with proof. A submission with dated updates, clear loss explanations and real values usually gets more carriers to quote and fewer conditions.

The market can help, too. The Council of Insurance Agents & Brokers reported commercial property premiums fell 5.5% in Q1 2026 (Leader's Edge) and 6.3% in Q2 (Insurance Journal). Apartments remain selective, so preparation still matters most.

What to gather for a quote:

Units, buildings, stories, square footage and year built for each building.
Dates and invoices for roof, wiring, plumbing and HVAC updates.
A statement of values with current rebuilding costs.
Current rent roll and occupancy, and any student or senior focus.
Security measures: lighting, cameras, gates, patrols and access control.
Your freeze and water-leak plan.
Property management company and its experience.
Five years of loss runs, with a short note on each large claim and what you fixed.
Your loan type (agency, bank, bridge) and the lender's insurance requirements.

When you're ready, request a quote or read how we work.

Questions Owners Ask

Why is apartment insurance so expensive in Texas?

Weather losses, freeze claims and large liability verdicts made carriers more selective about Texas apartments. The wider property market eased in 2026, but apartments are still closely underwritten, so a well-prepared submission matters.

Does my apartment policy cover assault claims?

It depends on the policy. Many apartment liability policies exclude assault and battery or cover it only up to a lower sublimit, so read the endorsements before you buy.

Can I raise my deductible to lower my premium?

Sometimes, but check your loan first. Agency and bank lenders cap deductibles; Fannie Mae, for example, generally limits all-other-perils deductibles to $50,000 or $100,000 depending on the property's insurable value.

Does my policy cover my residents' belongings?

No. Your policy covers your buildings and your liability. Residents need their own renters insurance, and many owners require it in the lease.

How much flood insurance can I buy from the NFIP for an apartment building?

For a residential building with five or more units, up to $500,000 for the building and $100,000 for contents, per building. Excess or private flood can add more.

Sources

Fannie Mae Multifamily Guide §501.02B: Deductibles — Checked October 2026
Texas Department of Insurance: February 2021 winter weather data call summary (March 2022)
U.S. Court of Appeals for the Fifth Circuit, Jenkins v. C.R.E.S. Management, No. 14-20609 (2016) — Summarizes Texas law on owner duty and foreseeable criminal acts
Texas Property Code §92.153: Security devices
FloodSmart (FEMA): Buy a policy — Waiting periods and exceptions
FEMA NFIP Summary of Coverage: Commercial Property
Insurance Journal: CIAB Q2 2026 market survey
FEMA NFIP bulletin W-13070: June 1, 2014 program changes — Other Residential (5+ unit) limits: $500,000 building, $100,000 contents
Leader's Edge (CIAB): Q1 2026 commercial market survey — Commercial property premiums fell 5.5% in Q1 2026

How Do You Insure an Apartment Complex in Texas?