Apartment buildings and other properties that property owners rent to individuals and families have to be insured to protect the property owner’s liability risk. The insurance is called habitational insurance and it provides coverage for the commercial property owner, not the tenants.
This type of insurance focuses on repairing or replacing the rental property, structures associated with the property (garages, shed, outbuildings), and any contents in the building owned by the property owner (except tenants’ belongings).
Who Needs to Buy Habitational Insurance?
Multi-unit rental property owners are the ones to buy this type of insurance, including:
- Apartment building owners
- Condominium owners
- Homeowners’ associations
- Rental house owners
What Are the Risks Involved with Apartment Building Occupancy by Tenants?
Tenant-occupied buildings have many of the same risks as any other structure: fire, wind, hurricane, theft, vandalism, etc. Because the building is owned by the commercial property owner, the tenants are responsible for covering their belongings housed in the property.
Other risks associated with a tenant-occupied building include:
- Lawsuits from tenants or their guests if they are injured or suffer property damage in your rental property
- Medical bills and legal fees associated with lawsuits, as well as other expenses in the event of a tenant lawsuit
- Damage to the property as a result of HVAC or mechanical system failure, water heater leaks, and more
- Losses in rental income if units are suddenly uninhabitable due to fire or other property damage
Essentially, because you are the property owner, you could be sued for accidents that happen on the property. Lawsuits can be time-consuming and expensive. Habitational insurance is a way to ensure you are protected.
Why Work with An Agent for Your Habitational Insurance Coverage?
Because different types of rental properties have different exposure to risk, ensuring you have an adequate limit and proper coverage can be a challenge. Keeping track of multiple policies and expiration dates can put even the most organized property owner to the test. Working with an agent simplifies the risk analysis and policy management effort significantly – especially if you have multiple properties.
Call The Nowell Agency Inc. at 601.992.4444 for more information about habitational insurance or request a quote for coverage online.