How Should You Insure Your Oregon Investment Properties?

Mark StraussBusiness | Commercial Insurance

Deciding on whether or not to insure your Oregon investment properties under the same legal entity is not easy to answer. Risk is inherent with everything that we do and each real estate investor I work with stands at a different point on the risk scale. Some set up separate legal entities for each investment property and others keep their real estate investments separate from one another.

The main thing you need to consider when you have multiple Oregon investment properties (single family, multi-family, commercial)  under the same legal entity is they all share the same limits of liability.

What this means is if you had a liability incident at separate investment properties the same policy would be drawing from and draining the liability limits of the policy. Depending on the size of your real estate investment portfolio this could create a significant gap and create an exposure for you.

I always refer to the following ‘Rules of Risk Management’ to assist with making tough risk management decisions.

  • Don’t risk more than you can afford to lose. This is a measure of severity.
  • Consider the odds. What is the probability that a loss will occur?
    • What kind of prevention do you have at each property to avoid slip and fall accidents?
    • Do you require your renters to maintain a renters insurance policy?
    • What are your procedures and protocols for having tenants report service or neighbor incidents?
  • Don’t risk a lot for a little. After weighing the cost of insurance compared to the potential out-of-pocket expense. Don’t self-insure a loss that could be transferred to the insurance carrier for a known amount of premium.

Based on answering the above what is the amount of risk at stake for you? What truly are the odds you would have a liability loss at multiple investment properties. In the end it comes down to whether or not you want to have the properties share the same liability limits.

Please contact me to assist with your needs to secure insurance for your Oregon Investment Properties.

This article is intended for informational purposes only and is not insurance advice or a substitute for consultation with a licensed insurance broker to address your particular risk or circumstance. You should also consult with your financial, tax advisers and real estate attorney to get their feedback on how you might want to structure things from their perspective.