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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Premium Advice: Avoid This Property Insurance Trap
While every dollar saved on insurance costs is a Net Operating Income dollar that can find its way back into a property’s bottom line, multifamily owners should remember that a low premium does not necessarily equal a good deal. Many policies sold on price alone contain several traps that can leave apartment owners in serious trouble.
Patrick Nugent, CCIM, JD with Commercial Insurance Solutions in Dallas explains why:
“Policies that have a co-insurance provision typically are less expensive, but for good reason: The property owner potentially can share in the loss.”
“A good example of this is a commercial general liability policy with an assault-and-battery exclusion, which is not the kind of exposure an apartment owner can afford to leave uninsured.”
“Additionally, policies that are based on actual cash value are less expensive, but much less valuable in the event of a loss.”
To learn more, contact Commercial Insurance Solutions
See a related feature, Over-insuring is Killing Your Profits.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection,tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
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Filed under: AAOA Forum, Insurance
On a sort of un-related note- do you think that more people are opting to rent nowadays versus purchase a home due to the economic crisis that America is going through?