Cut the Insurance Costs!

How about that call no Landlord wants to get?

The one where the tenant just came home from vacation, to find that a pipe in laundry room burst and there is three levels of water damage?

Yuck

Or how about the one from the fire department?

You want to be well insured…..But it eats your cash flow! What can you do to mitigate it?

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1. Property Maintenance and Safety Measures: Insurance companies prioritize well-maintained and safe properties. Regular maintenance to catch small things that can turn into big things will result in a long term better outcome for building and lower rates for you. Anyone who has walked their property to find the tenant has removed smoke detectors can attest to the simple fact of doing regular safely checks.

• ? Document any updates, changes and improvements you make, and preemptively provide to carrier to demonstrate your attention to this detail.

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1. Risk Assessment and Mitigation: Insurance companies conduct thorough risk assessments before insuring apartment buildings. Property owners who proactively identify and mitigate potential risks, such as fire hazards, structural weaknesses, or environmental concerns, are viewed more favorably.

• If you accept pets, make sure you have a dog policy that is followed, and a rider on your insurance to this end.

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1. Occupancy and Tenant Screening: The type of tenants and occupancy rates are critical considerations for insurance companies. Properties with stable, long-term tenants are often seen as lower risk. A great way to protect your properties and demonstrate this to your insurance carrier is a tenant education policy.

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• ? Provide tenants with an overview of basic safety features of your property when they move in, and have then initial this document as part of their lease. Showing your insurance company you not only provide these benefits, but also educate your tenants can go a long way.

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1. Security Measures: Security features, including surveillance systems and access controls are significant factors for insurance approval. Apartment buildings with robust security measures are less susceptible to theft, vandalism, and other criminal activities, reducing the likelihood of insurance claims.

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1. Compliance with Building Codes and Regulations: Adherence to local building codes and fire regulations is a fundamental requirement for insurance approval. Insurance companies appreciate property owners who stay updated on and comply with building codes, especially in regards to fire protection when you have a wood frame building.

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1. Avoid Liability: Show your insurance company you are as active as possible in mitigation of liability. Document well the snow removal and salting, in case a tenant has a ‘slip and fall’. How about providing just a splash pad instead of full pool, to avoid the liability? Those tree roots lifting the sidewalk are a trip hazard for your tenant- think ahead to avoid those risks.

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1. Mandate Renter’s Insurance: Do this in a structure where you pass the cost of the insurance on to tenant with a flat fee each month, but you source and place the insurance to ensure it is done and stays in place.

Conclusion:

Insuring an apartment building involves a thorough evaluation of various factors by insurance companies. Property owners can enhance their chances of insurance approval by prioritizing property maintenance, implementing risk mitigation measures, screening tenants, improving security, complying with building codes, maintaining a positive insurance history, and showcasing financial stability. By addressing these key factors, property owners can not only secure comprehensive insurance coverage but also potentially benefit from more favorable premium rates.