By Property Management Systems
You just invested in your first Portland Oregon Rental Property and after weeks of getting your rental ready to rent you’re now prepared to start marketing your property online and speaking with potential renters.
Before you take that next step towards officially becoming a landlord you should verify that you have enough insurance because you will find that one policy won’t cover everything and you should have multiple policies to protect your best interests.
What Exactly Is Landlord Insurance?
Landlords’ insurance is an insurance policy that covers a property owner from financial losses connected with rental properties. The policy covers the building, with the option of insuring any contents that belong to the landlord that are inside. Landlords’ insurance is often referred to as buy-to-let insurance, however buy-to-let insurance is a type of landlords’ insurance. It is important to distinguish between buy-to-let insurance which generally covers one property that has been purchased with a buy-to-let mortgage, and multi-property insurance, which covers two or more properties. Each of these types of landlords’ insurance covers different things. Landlord insurance is separate from landlords’ emergency cover.
The policy will normally cover standard perils such as fire, lightning, explosion, earthquake, storm, flood, escape of water/oil, subsidence, theft and malicious damage. Each insurance policy is different and may or may not include all these items. Optional coverage might include accidental damage, malicious damage by tenant, terrorism, legal protection, alternative accommodation costs, contents insurance, rent guarantee insurance, and liability insurance.
Landlords’ insurance policies typically do not cover any personal property belonging to tenants, or otherwise protect the interest of tenants; although a liability policy protecting a landlord or property manager will be of benefit to tenants should they incur a loss for which the landlord is responsible. – Wikipedia
Which Insurance Policies Should You Have?
To make sure that you have enough insurance protection should a natural disaster, accident, or injury occur at your rental property you should have the following insurance policies:
Landlord Insurance – This is by far the most common insurance policy that every landlord should have because this policy protects the landlord (property owner) should an accident occur which results in their tenant becoming injured at the rental property.
Loss of Income Insurance – Some landlord insurance policies won’t cover the loss of income so it’s vital that every landlord has a separate loss of income insurance policy. This form of insurance protection will help the landlord (owner) recover any revenue which may have been lost due to a variety of situations including acts of God.
Fire Insurance – Did you know that there were over 1,300 BILLION fires in 2015? These fires resulted in $14.3 billion dollars in property damage so it makes sense for every landlord to have fire insurance because this policy will also cover any cost that the landlord may incur when it comes to rebuilding or repairing a building after a fire.
Vacant Property Insurance – Following the “Great Recession” of 2008 there were many vacant properties in Oregon and those properties were heavily damaged or destroyed by vandals. Thankfully, with vacant property insurance, a landlord will be protected financially should damage occur at their Portland Oregon rental property, especially if it’s caused by contractors who may be making repairs.
Flood Insurance – This form of insurance protection has become even more vital for landlords to have in 2017 following a very wet winter which saw many cities in Oregon and California get ravaged by floods from melting snow and rain. With flood insurance, a landlord can have confidence that their investment will be protected financially especially if their rental is located in a flood zone.
Standard homeowner’s insurance doesn’t cover flood damage at all. It’ll cover some damage from rain, but if your home is filled with water as a result of rising bodies of lakes, rivers, streams, and oceans, it won’t cover you.
The most common flood insurance is offered through the federally regulated program known as the National Flood Insurance Program (NFIP). It has two policies:
One that covers your actual home (building property) up to $250,000
One that covers your personal property up to $100,000
You can buy one or both.
Earthquake Insurance – Last of all is earthquake insurance; every landlord should have this policy (especially if their rental is located in California) because we’ve had more earthquakes in recent years and it makes sense for a landlord to have insurance protection which will cover damage or repairs which are needed following an earthquake.
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To get affordable property management for your Portland Oregon Rental Property Contact Property Management Systems at (503) 515-3170 or connect with us online.