Proper Insurance Coverage for Apartment Complex Owners

Regardless of whether you own a smaller apartment complex with a dozen units or less or you own a much larger property, the property is understandably a large investment that you want to insure. If you have a mortgage against the property, your lender typically will require you to maintain a multifamily insurance policy with specific minimum coverage types and limits. Insuring apartments in Arizona may be essential, but the type of coverage that you purchase plays a major role in how effective and protective the policy is to you.

Liability Coverage
One of the more important types of coverage to consider when insuring apartments in Arizona is liability coverage. This type of insurance pays other parties and does not provide you with any compensation. Other parties may sue you for damages, such as if they are injured on your property because of negligent property maintenance. This is only one of many types of liability situations that you may face. Coverage may pay for legal costs associated with a lawsuit, a settlement outside of the courtroom or a court-ordered judgment. Before buying this type of coverage, it is important to understand all of the liability risks that you may face as a commercial property owner and the potential costs associated with those risks.

Building Repair or Replacement Coverage
In addition to liability risks, there are also financial risks associated with property damage. Building or property coverage may pay for repairs or even for a full building replacement when the property is damaged by fire, windstorm and many other events. Keep in mind that flood insurance typically needs to be purchased as a separate coverage. This type of coverage is not usually necessary when insuring apartments in Arizona, but you should research flood plans to determine what your property’s risk is. When insuring apartments in Arizona, remember that you do not need to insure the value of the land. Insurance coverage should be in an amount required to completely replace the building in a worst-case scenario. Land is never destroyed, so it does not require coverage.

In addition to focusing on the types of coverage for apartments and their limits, you should choose an affordable deductible. A common deductible amount when insuring apartments in Arizona is one percent of the property’s value. However, this can be a small fortune when you own a larger apartment complex. Always ensure that the deductible is affordable for you to pay at a moment’s notice. Keeping an equivalent amount of money in a savings or money market account is a smart idea.

Best regards,
Gary Hanson
Professional Insurance Strategies
P: (602) 481-0161 • F: (623) 463-9001 • E: ghanson@proinsgroup.com
Physical Address: 2822 W Northern Ave. • Phoenix, AZ 85051
Mailing Address: 3655 W Anthem Way Ste. A 109 #283 • Anthem, AZ 85086
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Wrap Up / Owner Controlled Insurance Policies, AZ , NM, NV

General Liability for new apartments and condominiums construction projects:

Construction projects for apartments, condominiums, and some other large scale projects are complex endeavors. These projects involve many different entities and trades. Many times the best policy for these types of risks is a Wrap Up policy or Owner Controlled Insurance Policy:

Cradle to Grave Coverage
Wrap-up policy is extended to cover the entire completed
operations period up to the applicable statute of limitation(s) so
that there is insurance coverage now and going forward
Eliminates Contractor mark-up
On insurance pass-through costs through insurance credits.
often contractor credits can be significant in funding the wrap
premium.
Less Litigation
No need to allocate blame since all participants are on the
same policy.
Broader Coverage
That meets prescribed standards and provides uniform
insurance protection; higher limits can be purchased due to a
larger volume of insurance.

Gary Hanson
Professional Insurance Strategies, LLC
6708 W. Bethany Home Rd
Glendale, AZ 85301

ghanson@proinsgroup.com
602-481-0161
623-551-6716 Fax