Insurance for Apartment Buildings
Madison Avenue Insurance Group has been writing insurance for apartment building owners since 2006. Our expert team of agents are very experienced in the apartment building market in Washington and Idaho and can work with you to find the right coverage for your specific needs.
We have direct access to the leading insurance carriers and comprehensive programs for all building types, sizes, and construction years. This includes specialized coverage for apartment building owners, protecting against risks such as fire, vandalism, faulty panels and other unforeseen events.
We are constantly looking for new markets and creative ways to provide the best options available for our clients. We are open for new business and have insurance options for you!
Have you been non-renewed from your current insurance carrier?
Does your building have “black listed” electrical panels?
Do You Have Prior Losses?
WE CAN HELP!
The commercial property insurance market has continued to tighten in recent years. Market cycles are nothing new to the insurance industry; however, the hardening in the commercial real estate market to the degree of which we see it is unique both due to its persistence and severity. We are seeing a combination of restricted terms, diminished coverage, increased rates and greater underwriting scrutiny unlike anything in recent memory.
What’s driving the market?
In a word: unprofitability. Apartment building owners insurance had already been tightening up more notably than other casualty lines mainly due to years of under pricing in the preceding soft market. And as standard carriers have left the space for most properties over 25 years old, the resulting capacity decrease has exacerbated difficult market conditions. At the same time, loss costs have continued to climb, driven by social inflation and third-party litigation funding.
Contact us today to discuss your portfolio and needs.
Why are apartment buildings with Zinsco, Federal Pacific and Challenger electrical panels being non-renewed?
DESIGN Flaws – Insurance companies and the Consumer Product Safety Commission consider Federal Pacific Electric panels dangerous. When tested, Federal Pacific Electric Panels are hazardous due to age and faulty components with higher failure rates. The breakers have been shown not to trip, causing the panels to catch fire. Iin the production of the Zinsco panels, there was a particular flaw. A specific aluminum alloy was used that can oxidize. Challenger electrical panels have been known to overheat, which are hazardous and possibly lead to fires.
Increased Energy Demands – Modern buildings have increased energy demands, which can exacerbate a failure in older electrical panels.
Electricians and insurance companies recommend replacing electric panels over 40 years old, mainly where aluminum or ungrounded wiring exists.
What are the different Types Apartment Building Insurance Coverage?
Actual Cash Value (ACV) Pays out for property damage at the cost to repair or replace less depreciation. Coverage is valued “as is”.
Replacement Cost (RC) Pays for the cost to repair or replace the building and/or contents with new, but like materials.
Functional Replacement Cost (FBV) Pays for the cost to repair or replace the building and/or contents with like but lesser quality materials.
Guaranteed Replacement Cost (GRC) Pays the cost to repair or replace the building and/or contents event if it exceeds the coverage listed on the policy.
What are the different Insurance Policy Coverage Forms?
There are three different insurance policy forms: Basic, Broad and Special.
The type of policy you have will be listed on the declarations page of your insurance policy and should also be listed clearly on the insurance proposal or application you sign prior to binding your policy.
The difference between these coverage forms is often misunderstood by property owners and confusion on this topic can lead to large or unexpected gaps in coverage.
Basic Form
The Basic Form policy is the least comprehensive of the three coverage options. Basic Form policies only cover the specifically named perils. This means that if a coverage is not specifically named in the policy, there is no coverage. Basic form insurance policies provide coverage for Fire, Lightning, Windstorm or Hail, Explosion, Smoke, Vandalism, Aircraft or Vehicle Collision, Riot or Civil Commotion, Sinkhole Collapse and Volcanic Activity.
Broad Form
Broad Form policies offer more coverage than Basic Form. They include coverage for all of the same hazards in a Basic Form policy plus several additional hazards which are expressly named. Like the Basic Form policy, a Broad Form policy covers only named perils. If the coverage is not specifically listed, it is excluded.
Coverages included in a typical Broad Form policy are the same as in the Basic Form policy plus the following.
Burglary/Break-in damage, Falling Objects (Tree’s), Weight of Ice and Snow, Freezing of Plumbing, Accidental Water Damage, Artificially Generated Electricity
Special Form
Special Form coverage is the most comprehensive of the three options. Note that Special Form policies read differently than a Basic or Broad Form policy. In a Special Form policy, instead of the document listing what is covered, all perils are covered except for what is specifically excluded in the policy.
The Special Form policy reads opposite of a Basic or Broad Form policy. All unlisted perils are covered perils. This can be extremely beneficial to the insured and is the ideal coverage to have.
Common Special Form Policy Exclusions Ordinance of Law, Earthquake, Flood, Power Failure, Neglect, War, Nuclear Hazard, Intentional Acts- some of which can be purchased back onto the policy by endorsement.
What are some of the rating factors in apartment building insurance?
- Crime / Vandalism Scores
- Age of roof
- Age and type of electrical panels
- Age and type of plumbing
- Age of heating
- Claims history
- Overall maintenance of the property
- Fire zone
- Fire protection systems (Sprinklers or automated fire alarms)
- Construction Type
Apartment Building owners that put effort into maintaining safe, updated and well-maintained properties without claims history pay the least insurance costs.
The list above are just some general guidelines, and each insurance carrier will have its own specific criteria. It’s important to work with an insurance professional experienced in the commercial insurance market.