Apartment complex owners who own several complexes under one business model usually get an instant education on the nuances in apartment insurance policies. That’s because for every unique apartment complex, there is an equally unique coverage requirement in place.
Apartment complexes are insured with the size of the business in mind, which can greatly influence the types of coverage needed and the limits necessary to provide adequate coverage.
And don’t think all businesses take the same kind of coverage. Not so. In fact, if you head a multiple-location apartment business, would you choose a loss limit approach to your policy coverage? You should.
That’s because a loss limit is property insurance whose limits are lower than the total property values but high enough to cover a single loss occurrence. But if you use a traditional insurance coverage plan, you may be paying too much for coverage.
To insure an entire multi-location business under one policy makes sense, but to apply coverage to the entirety of the sum total of property values is expensive and entirely too much coverage for your particular situation. What’s needed is coverage equal to the greatest loss exposure for one single occurrence.
A specialist broker in apartment complex insurance coverage examines your business structure, including all your locations, for loss exposure. A policy package is then created to meet both the individual needs of each unit and the collective needs of the entire business.
Traditional insurance programs cannot adequately address liability issues that are part-and-parcel of the apartment complex business. Only those insurance companies and brokers who specialize in your apartment complex industry understand the unique exposures you face.
Moreover, these specialists also know where to look for gaps in your liability coverage, and how to respond to those gaps, whether through insurance products or risk management techniques.
Finding the best underwriting company for an apartment operation can be a real challenge, especially for insurance agents who don’t work in this area every day. To work effectively with underwriters and the few good companies that do insure apartments, an agent has to know the apartment industry and has to be able to speak knowledgably about apartment complex clients and prospects.
By James Clapton