If you’re a property investor in Portland, you want to know that your investment is protected. Natural disasters are the leading cause of property damage in the U.S.. Oregon alone has seen a 280% increase in natural disasters in the last 40 years, with wildfires making up a big portion of this increase.
Natural disasters are the most alarming emergency situation that you’ll deal with as a landlord. But it’s not the only thing you will want to factor into the coverage for your property and your tenants. You’ll want coverage that will cover all the situations that can threaten you financially.
Here at Kerr Properties, we always have a mindset of total protection for property owners. That’s why we’ve put together this guide on landlords insurance, renters insurance, and what you should look for in both.
Understanding Landlords Insurance
Landlords insurance covers any unplanned damage to your property. The coverage is designed to protect your interests as a property investor. The major concern is property damage from natural causes. This can reduce your costs from repairs due to fires, storms, burglary, or vandalism.
This differs from standard homeowners insurance in that the coverages are designed to protect your rental business as well. You should search specifically for a policy with good liability coverage. This can protect you in the event of a tenant or guest incurring injury on the property. This is especially helpful if a tenant were to sue for damages.
There are also additional coverages you should search for in a comprehensive landlords policy relating to your income. If a natural disaster makes a unit uninhabitable, you will be out of your rental income for that unit until repairs are made. Sufficient landlords insurance can also cover you from loss of rental income in these instances.
Exploring Renters Insurance
Renters insurance is designed to protect the tenant’s financial interest. When major damage to a rental unit happens, tenants are also at risk of losing their personal belongings. These policies will cover the cost of any personal belongings lost in damage to their rental up to a monetary limit.
Similar to landlords insurance, renters insurance should also protect your tenant from liability and loss of use. If the tenant is responsible for injury to another party, this policy can protect them from those expenses. It can also cover them for the cost of relocation if they have to vacate the premises after a natural disaster.
Tenants have some very easy options for getting discounts on renters insurance as well. The most common of these is bundling with car insurance. This makes payments on the policy more convenient and cheaper. They can also get discounts through paying the policy on their lease in full ahead of time or being in a gated community.
Key Differences Between Landlords and Renters Insurance
The biggest separation between landlords insurance and renters insurance. A great building maintenance plan in conjunction with insurance on your property will protect you as the owner, but neither of these will protect your tenant and their property from harm. Renters insurance is for the sole benefit of the tenant, but as we’ll explore later in the article, their benefit is in your best interest as well.
A combination of both is in the best interest of your rental’s success. If you have a complete insurance package on your property and your tenant carries a policy for themselves, you are less likely to see major losses from a crisis. That way, both parties involved in a lease have protection from damage and liability.
Factors to Consider When Choosing Insurance
When shopping for the right policy for your property, make sure that the policy offers coverage for all common forms of damage as well as any special concessions unique to your rental. For instance, if you have other structures on the property such as a shed or garage you can have these covered in the policy as well.
Oregon landlords insurance will not include coverage for loss due to floods or earthquakes. You can however get flood coverage through FEMA’s National Flood Insurance Program. Some insurance providers will offer optional add-ons for earthquakes as well if your property meets certain qualifications.
Tips for Optimizing Insurance Coverage
Just like your tenants can bundle their renters insurance, you also have that option with your landlords insurance. You can ask your provider for homeowners insurance or auto insurance if they offer bundle discounts for landlords insurance. This can save you money on insurance costs in your personal and business finances.
You can also take further steps towards discounting your insurance through landlord organizations, going a certain amount of time without filing a claim, or installing safety features like smoke detectors on the property. If your discounts are maxed out, then make sure you’re reviewing your policy annually to make sure your deductibles and coverages are where they need to be.
Should I Require Renter's Insurance for Tenants?
Oregon state law does not require either landlords insurance or renters insurance to be carried. However, you can legally require your tenants to carry renters insurance in the lease agreement should you choose to. The only caveat is that you cannot require the tenant to carry coverage greater than $100,000.
As mentioned earlier, it can be a great idea to require renters insurance in your leases. In case of significant damage, your tenant having an avenue to recoup losses will make them more likely to stay in the unit and resign a lease. It also makes them less likely to pursue legal action against the landlord when they’re already covered from financial loss.
Further Protection for Portland, OR Landlords
Having both landlords insurance and renters insurance for all of your rental properties is the best security blanket for those worst case scenarios. But protecting your property starts with a top notch maintenance plan and tenant screening the right way. The best way to achieve that is through excellent property management.
With the right property manager, the challenges of owning a rental property become easier. Consider Kerr properties to be that partner for your investment. We’re always here for our owners to give them that local expert who’s always ready at a moment's notice. There’s a reason why we are one of the longest tenured and most trusted property managers in the area.
Contact us and we’ll be ready to partner with you and your rental property with the same level of care and expertise.
