Not all real estate insurance is the same. For investors and landlords, it’s essential to understand the differences between the major types of coverage available and choose the policies that suit their individual needs. When purchasing a policy for an apartment building, carefully consider which one will best serve the specific uses of your property and the risks that go along with them.
Umbrella and package insurance
“An umbrella policy manages liability for a wide variety of risks.”
A real estate umbrella insurance policy covers most of the needs of landlords who own an apartment complex or commercial development. This kind of coverage is a straightforward way to manage liability for a wide variety of risks landlords face. For instance, tenants might cause property damage or be injured on the property, and equipment like hot water boilers can break down over time.
If you own multiple buildings, it might be wisest to insure all or several of them under a single policy. A real estate insurance package provides comprehensive protection for apartments, but also commercial, office or mixed-use buildings and shopping centers. This way, property owners save money while gaining protection against losses due to property damage, natural disasters, equipment breakdown and dishonest employees, among other issues.
What’s the difference between insuring apartments and developments?
When insuring apartments, you must take a different set of concerns into account than for other real estate developments, like buildings used for industrial manufacturing, retail or warehouses. These other types of buildings generally require more comprehensive insurance, but getting the options just right for the complex takes thoughtful planning. Policies should be focused on the specific problems that arise in a residential building, taking into account any special circumstances that may arise due to conditions like climate.
Every landlord will have different requirements, but there are a number of common risks faced in apartment complexes. Owners and investors are often interested in coverage such as:
- Property insurance to cover any repairs or replacements, often including structures like fences or garages and any personal property used for upkeep.
- Comprehensive liability in case of situations like injury to a resident or damage to their property.
- Loss of income insurance for periods when you might need to cease operations.
- Crime insurance for problems like vandalism or employees stealing from the business.
- Equipment breakdown insurance to handle any damage that might result from malfunctioning equipment on the premises.
- Tenant move back insurance in case you need to cover the costs of residents returning after a situation forced them to vacate the property.
Keep in mind that particular aspects of your apartment building might make it more difficult to obtain certain kinds of insurance coverage. These factors include:
- A low occupancy rate.
- A small number of units.
- Outdated utilities or wiring.
- Providing student housing or assisted living.
Work with your insurance provider to address any issues with occupancy, available equipment or preparation for emergencies. McGowan Program Administrators customizes your policy so you get the coverage that matters for your apartments. With “The Power of the Pen” on your side, you can obtain the umbrella or package real estate policy that precisely suits your property.
