Owning and operating an apartment complex (or complexes) comes with a wide number of risks: Your building could incur damage, someone could become injured on your property, or your business could be interrupted for an extended period of time.
Having the right amount of coverage is vital to your success. Having too much coverage can cost you money and hurt your bottom line. And not having enough coverage could destroy your business in a loss event.
How should you and your insurance company determine the cost of your insurance policy? Look at for major factors:
- The value of your property
- The value of your business operations
- Your business and property’s loss performance in the past
- Your opportunity for future losses as calculated by an underwriter
Some of the factors listed above can change over time, so it is key to review your coverage over time and make changes when necessary. For example, you may need more coverage if you improve your property, make renovations, or expand your business. You may need less coverage if the state of your property declines or if you make improvements to your property that will protect against storm damage or vandalism. In many states, your insurance premium may go up if you file high numbers of claims.
It is also imperative to get the correct types of coverage for your apartments and rental business. For example, you may wish to purchase flood insurance, business crime insurance, business interruption insurance, or general liability insurance. All of these policies can help protect you, but they also affect how expensive your insurance bills are.
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