Oregon’s Renters Liability Insurance Law Explained

Renters liability insurance can be a game-changer for tenants and landlords alike. For tenants, it  prevents a number of financial hardships. For landlords, it means you can rest easier knowing your tenants have protection from potential issues that could affect you. Recently, ORS 90.392 made changes to when and how landlords can require their tenants to purchase renters insurance. 

What Is Renters Liability Insurance?

Renters insurance covers belongings such as clothing, furniture, and household items. In some cases, it may also protect electronics and jewelry. This means that if a tenant’s property is stolen or damaged, the insurance will help to cover it. It also covers personal liability in cases of bodily injury or property damage, protects personal property even while traveling, and additional living expenses in instances where the rental property is damaged or under repair.

There are many benefits for tenants with renters insurance. Here’s what the new Oregon law has changed about a landlord’s ability to require this insurance. 

How Does This Law Affect Landlords?

Many Portland landlords may already require their tenants to purchase renters insurance before moving in. What ORS 90.392 has changed is that you can legally require your tenants to have renters insurance in a written agreement within a specific set of parameters. If a tenant does not obtain rental insurance, you may be able to terminate their tenancy with cause. However, tenants who get renters insurance before eviction are no longer eligible for removal. 

The coverage you can require your renters to obtain is capped at $100,000 per occurrence, or the customary amount required for similar properties in the same rental market – whichever is more. 

As a landlord, you may require your tenants to provide the following documentation:

• That they have named you, the landlord, as an interested party on their insurance and authorized the insurer to notify you if the policy is canceled, not renewed, or reduced. 
• That the insurer will periodically notify you that the tenant’s rental insurance is being maintained. 

This new law applies to both new and existing tenants. For tenants signing a new lease, landlords must include the provision about rental insurance in the lease with a summary of the exceptions to this requirement. You may require your tenants to prove documentation of having purchased renters insurance before their tenancy begins. If your tenants are currently renting month-to-month, you must give them at least 30 days’ written notice of the requirement to purchase renters insurance and the written summary of exceptions. 

What Are the Exceptions to the Law?

As with any law, several factors and situations will impact Portland’s landlords. Here are a few of the most important exceptions:

• You cannot require your tenant to obtain renters insurance without also maintaining comparable liability insurance and providing your tenant with documentation. That documentation can be presented in person, by mail, or by posting it in a common area, and must consist of a written certificate of coverage. You must also disclose these requirements in the written summary you present to your tenants.
• The law also forbids landlords or tenants from making unreasonable demands with the ultimate effect of harassing each other to provide insurance coverage documentation. This means that you should be cautious when following up with your current or prospective tenants about their renters insurance, but also that you have recourse if your tenants are overly aggressive about seeing your own documentation. 
• You may not require your tenant to obtain renters insurance from a specific insurer. 
• You may not require your tenant to name you as an additional insured party, or as having any special status on the tenant’s insurance policy other than as an interested party. 
• You may not require that your tenant waive the insurer’s subrogation rights or make a claim against the tenant’s renters insurance. The exception to that rule is if your tenant is legally liable for the claims cost and not because of ordinary wear and tear, acts of God or the landlord’s conduct, or if the claim is greater than their security deposit.
• You may not require your tenant to maintain renters insurance if their household income is equal to or less than 50 percent of the area’s median income, adjusted up to a five-person family. In Portland, this means that you cannot require your tenant to maintain renters insurance if they make $37,300 in a one-person household or $42,600 in a two-person household, and up to $57,550 for a five-person family. These numbers are for 2022, so you’ll want to stay up to date on the area’s changing income rates in the future. 
• You may not require your tenant to maintain renters insurance if the building is subsidized with public funds such as housing assistance.

Navigate Portland’s Shifting Legal Landscape

The past few years have seen considerable upheaval in Portland’s rental market. From the pandemic eviction moratoriums to the pressures of a high-demand market, navigating these challenges has grown even more difficult for the area’s landlords. Rather than trying to stay on top of all the curveballs Portland’s rental market has to throw, have you considered working with a property management company to keep your property profitable and in good repair without all the hassle? 

Rent Portland Homes by Darla Andrew strives to provide Portland’s landlords with the best property management. When you sign on with us, you’re entering a partnership in which you can keep as much of a hand on the wheel of your property’s management as you wish. We help ensure that your property stays entirely up to date on Portland’s codes, laws, and ordinances, protecting you from potentially costly legal fees. You can rest easy knowing that your rental is in good hands without dealing with the stress and hassle of managing it directly. If you’re interested in learning more about how we can help you with your rental property, contact us through our website or reach us by phone or text at (503) 515-3170. We’re here to help!