The Top Apartment Building Insurance Coverages

In Multifamily & Apartments by Tim DieselLeave a Comment

Apartment building insurance coverage is necessary since there’s always some form of risk. That’s what insurance is, by the way. It’s simply the transfer of risk from one party to another. Even the wealthiest apartment building investors carry insurance policies. They do so because it’s a cost-effective way of transferring risk away from them individually. In the world of commercial real estate investing, there are many upsides. But, there is always a real possibility something can go wrong.

Apartment Building Risks

So, what are these risks? Well, as one might imagine, they are events such as fire, storm, and personal injury. Risk can even extend into other things, like discrimination lawsuits, misrepresentation, fraud, and more. Now, not one of these scenarios are pleasant to think about. Nevertheless, they are real. And, having protection is an absolute must.

It is so very important that you make sure you’re completely covered if something goes wrong – even if the chances are remote. It’s essential to have the proper insurance policy in order to keep you from unnecessarily losing money or assets that may be impossible to recoup. —

On any given day, something terrible can easily go awry. For instance, a clothes dryer, filled with lint, overheats in a laundry facility. In an instant, a fire breaks out, consuming the entire room. Or, a strong storm hits, damaging roofs and more. It’s for these situations insurance is a necessity.

Most Important Apartment Building Insurance Coverages

Of course, you never know what to expect. So, it’s best to have the right coverage in-place. This means you’ll need different policies. And, you should definitely speak with an experienced, licensed professional about which policies and amounts are actually needed for sufficient coverage. Here are the top apartment building insurance coverages you need to know about:

  • Commercial property insurance. This policy extends to cover all structures on the property or on the complex. It covers the apartment building(s), along with office spaces, common areas, fences, pools, storage facilities, and so on. It likewise covers any additions or improvements, as well as those under construction.
  • Loss of income coverage. The greatest single benefit to owning an apartment building is the money-multiplier effect. Instead of owning a single family residence, where there is only one rent to collect, apartment have multiple rents. But, if there is an interruption and the property becomes temporarily uninhabitable, that flow of income stops. That’s where loss of income coverage comes in handy.
  • Commercial general liability policy. If there bodily injury occurs or property damage happens by third-parties, this coverage protects you from lawsuits.

Of course, there are also other types of insurance — umbrella, workers comp, errors and omissions, and more. Be sure to speak with an experienced, licensed professional about the appropriate types of insurance.

If you’d like to learn more about commercial real estate investment benefits and more about the process, please contact me.


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