Please continue reading part two (2) of this article below….
The second type of apartment building insurance policy that you must have is called property insurance. There are a multitude of potential disasters that may strike at any time. These disasters may very well cause damage or destruction to your apartment building. Sometimes the damages are small, other times the damages can be large enough to destroy the entire building.
In essence, property insurance helps to protect you if your building is damaged by a covered type of loss.
Typically speaking damages caused by fire, smoke, windstorms, vandalism, lighting, vehicles, aircraft, explosions, and riots are considered covered damages. It should be noted that floods are not covered under the vast majority of property insurance policies, which means coverage requires a separate flood insurance policy.
Business Income Insurance
What would happen to your bottom line if your tenants were forced to leave their apartments because of a covered loss such as a fire? In essence, you would not be receiving any rental income for the foreseeable future. That can cause a tremendous amount of financial loss that may be difficult to come back from. This holds especially if you have mortgage or multiple mortgages on the building. The banks still require monthly payments even if you are not taking in any rent.
The good news is that business income insurance goes a long way in reimbursing you for the income that you will lose when your building is out of operations based on a covered loss. Once again, disaster can and does strike at any time. In the minimum, the business income insurance will provide you with peace of mind knowing that you are covered from a rental income standpoint.
Did you know that if the limit of your liability policy is reached, you may very well be on the hook for the remaining balance of the claim? Although liability insurance provides you with a great deal of financial protection, you may run into a situation where the lawsuit is bigger than the limits of your policy. That is exactly where umbrella insurance comes into play. In essence, it provides coverage that goes above and beyond your liability policy.
For example, if your liability insurance policy has a limit of $2 million it will not pay any more than that amount in any given lawsuit. However, you may encounter a lawsuit where the award is set at $3 million. If you do not have an umbrella policy that covers the difference, you will end up going out of pocket for $1 million. That much money can hurt even the most insulated apartment building owner. In some cases, it can ruin you from a financial standpoint.
If you own an apartment building, you need to have the proper apartment building insurance policies in place. Please consult with a professional insurance agent that specializes in providing apartment building insurance. It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.