In the state of Texas , there are big differences between policies for an owner-occupied house and a tenant-occupied house. If you move and decide to keep your old house for rental income, you will need to change your insurance policy to a tenant-occupied policy. A tenant-occupied home insurance policy is called a TDP or Dwelling/Fire insurance.
The following key characteristics can vary from one company to another on a TDP policy:
- The existence and amount of water damage coverage. Most TDP policies have $0 in water coverage for losses caused by a broken pipe or appliance, etc.
- Whether falling objects are covered. The best example of this is a tree that falls on your house.
- Few TDP policies provide liability protection. However, we do have some that will.
- Replacement Cost vs. Actual Cash Value Coverage – replacement cost coverage will pay the full amount to replace your house, roof, etc (up to your policy limit). Actual cash value coverage will subtract depreciation from the replacement amount in the pay-out.