No one goes into business or makes a large financial investment in order to lose money. Whether it’s long-term financial security or simply an entrepreneurial spirit, you bought a multi-family apartment building for a reason. Make sure you protect your investment with the right insurance coverage.
SPEND A LITTLE MORE TO SAVE IN THE LONG-RUN
The urge to purchase the easiest, least expensive policy is very real for many rental property owners. It’s hard to believe that natural disasters may affect you or that a tenant might sue. With the wrong insurance coverage, you may find yourself facing insurmountable costs for repair, replacement, medical expenses, and more.
Look for all-risk insurance policies instead of the named-peril policies. Our agents will work with you to find as broad a policy as possible. The best policy is the one with the least exclusions, because anything that can happen, will happen. Look for a policy that covers damage from fires, explosions, earthquakes, tornados, and hurricanes, but understand that policies may exclude one or all.
To know what kind of coverage you’re likely to need, review the property’s history, especially if you’re a new owner. Determine what, if any, natural disasters have affected the property in the past. Look to see if there have been any previous liability issues and whether they’ve been corrected or not. Do your best to make sure that you purchase a policy that doesn’t exclude known issues or previous natural disasters. Understand that your coverage can and will be affected by your location. If you live in areas where hurricanes or earthquakes are a reality, your costs may be higher or your policy may include more exclusions.
WHAT SPECIFICS SHOULD YOU LOOK FOR IN YOUR POLICY?
In the long-run, replacement value coverage may cost more, but it will give a better return in the event damage or destruction occurs. Work with your agent to find a policy with full-replacement costs included. Some disasters may impose specific limits, especially if you live in an area prone to certain issues.
Business interruption insurance is typically included in your policy. Make sure you know the limits and restrictions. If something happens to limit the amount of income you can take in from tenants, you’ll want to know if you can recoup the lost income.
As a business owner, (and owning an apartment community is a business) you’ll want to make sure you that have a Charlotte liability insurance policy in place. This will cover any claims brought against you for damage or injury that occurs to a third party while on your property. If someone slips and falls at the pool or damage occurs to a unit during routine maintenance, you may be responsible for medical costs, replacement costs, or repairs. General liability coverage covers those costs and should be included as part of your insurance portfolio.
Don’t let poor insurance coverage be the reason you don’t see a return on your multi-family apartment building investment. Contact us for a quote or to review your current policy. We want to make sure you and your property are protected.
Image courtesy of Flickr user NNECAPA Photo Library.