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There are several factors to consider when obtaining insurance for an apartment building.

Lender Insurance Requirements

Before settling on a lender for your apartment complex, it is important to understand apartment complex insurance requirements. They can vary from simple to complicated. All lenders require that the apartment buildings be covered. Many also require income and ordinance coverages, as well as an umbrella policy. Some lenders require higher coverage limits than others. More complicated apartment building insurance requirements can force you to carry coverage you may not have carried otherwise, which can drive up premiums.

Reconstruction Cost Valuation

It is virtually impossible to know exactly how much it would cost to rebuild an apartment complex until it comes time to rebuild, however insurance agents should estimate the cost using a reconstruction cost estimator. The agent will need to collect and input apartment building features such as square footage, number of stories and construction type. These valuations should be calculated when you start the commercial apartment insurance, and at renewal every 1-3 years. Insurers will often automatically increase apartment owner insurance coverage at renewal to keep up with inflation, however these increases sometimes are not sufficient, and sometimes outpace the valuation, in which case coverage (and premium) can be reduced.

System Updates on Older Apartment Buildings

The goal is to qualify for a standard, admitted, carrier, as they offer superior coverage and rates with fewer policies. Here is more information on choosing a commercial insurance company. For apartment buildings older than 20-30 years to qualify, the roof, electrical, plumbing and heating must have been updated. The definition of “updated” is a grey area, and can vary from one carrier to another. All apartment building insurance companies will require that the roof be completely replaced. For electrical, plumbing and heating, some carriers will accept minor updates, while others expect complete and extensive updates. It’s always best to be fully transparent regarding updates, since if the information provided is not accurate, insurers can deny claims for misrepresentation.

Loss Runs

Agents often must submit loss runs to underwriting when applying for commercial apartment insurance. Loss runs are how insurance companies share claim data. This is very important information, as claims are a factor in rates and eligibility. Apartment owner insurance underwriters want to know when the claim occurred, how the claim occurred, how much was paid, and what was done to prevent similar claims from recurring.


There are several insurance coverages available for apartment owners. The most important coverages are: Building, Liability, Income, Ordinance and Sewer & Drain. For details on available apartment complex insurance coverages, click here. For recommendations on coverage limits and deductibles, talk to a qualified agent.

Looking for Apartment Building Insurance in Greater Seattle?  Contact Chris Elliott Insurance Agency!

Our Seattle insurance agency currently provides insurance for apartment building owners in Greater Seattle with portfolios ranging from 5 to 500 units. We access insurers brokers cannot, and often offer superior premiums and coverage, to include guaranteed replacement cost. Some of the services we provide include ensuring coverage is adequate and updated to keep up with increasing building costs (without overcovering), assessing losses to determine whether filing a claim warrants any potential surcharge, and working closely with underwriting to ensure all available discounts and credits are applied, so apartment owner insurance premiums are competitive. Contact us today to learn more or receive a quote from our team.

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