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.”