When Buying Multifamily insurance, the underwriter will determine following aspect of the building. The age and type of wiring; Plumbing; Heating (whether it has central heating, window units or floor vents); Type of construction; and Firewalls.
Risk involves in the apartment building that will be in consideration under insurance
o Fire, storms, and other catastrophic damage to the property
o Liability for tenant, employee and visitor injuries
o Theft or vandalism
o Loss of rental income
o Invading the right to privacy
o Advertising liability
o Discrimination lawsuits filed by disgruntled tenants or employees
o Allegations of fraud, misrepresentation, and other intentional acts by employees
Basic multifamily insurance at least have to have Commercial property and commercial liability.
o Commercial Property Insurance coverage-
Commercial property coverage protects against the loss of your apartment building or buildings within a complex, as well as other structures on the property, like: garages, office space, common areas, fences, swimming pools, and storage buildings.
o Commercial General Liability Insurance coverage-
Protects against claims of actual or alleged property damage or bodily injury by third parties (tenants, visitors, repair persons, delivery persons, etc.). This is the type of coverage need to protect the multifamily owner from lawsuits if a tenant or visitor is injured at the property’s pool or gym, or suffers a minor event like a slip, trip, or fall on the premises.
General liability will pay for damages if a customer is injured at your apartment complex pool or gym. General liability covers losses to your rental families if their property is damaged when your employees enter the premises to make repairs or perform inspections.
· Catastrophic is one of the event that will considered closely for the insurance-
o Catastrophic event can destroy the building from one occurrence.
o Buying earthquake and flood insurance separate from basic policy to get coverage as needed.
· Condo fire in Dallas that resulted in total loss of the total of 24 unites building.
· According to National fire Data Center, from 2013 to 2015, an estimated 109,700 multifamily residential building fires were reported to fire departments within the United States each year. These fires caused an estimated 405 deaths; 3,975 injuries; and $1.4 billion in property loss.
· Loss of use overage that is in the condo or multifamily insurance policy-
o Loss of use coverage helps pay for expenses in the unfortunate event you can’t live in your condo due to an incident. Also known as additional living expenses (ALE) insurance or coverage D, “loss of use” is typically included in a standard set of coverage for the condo insurance policy.
· If the multifamily owner decides to remodel they may buy builders risk insurance.
· Workers Compensation- is one of requirement that entity need to cover their employee.
· Combo policy like property insurance and CGL policy in one package to save some money
· Commercial Umbrella Policy for the apartments and condos that may need extra coverage on the large loss.