Owning an apartment building comes with many good things, like the opportunity for steady rental income, as well as some not-so-great things, such as having to pay for injuries or things broken by tenants and their guests. Thankfully, there are some insurance policies that you can put into place in order to cover accidents and other things where you might be held liable. In addition, your tenants should have insurance coverage as well. With all these moving parts, let’s break it down.
What Your Insurance Covers
Usually, an apartment building owner has two insurance policies in place: property insurance in case of physical damage and liability insurance in case of accidents on the property. There are numerous other options as well, such as workers’ compensation for your employees, as well as employee theft insurance, just in case. However, the first two types of insurance are what’s important here.
Property insurance provides coverage for your building. It pays for the main hallways, elevators, exterior of the building, and more. If something should happen, like a fire or a flood, the insurance will kick in and pay for repairs. In some cases, the insurance pays for issues inside of the walls as well, like broken pipes or a burst boiler. It all depends on the policy.
The other type of insurance, liability, covers issues where you, as the property owner, could be held liable for accidents and incidents. For example, if the floor of the lobby is wet and there aren’t signs up, and someone slips and falls, they could sue you for reimbursement on their medical bills and missed time at work. The same is true for issues on the property, such as cracked concrete, trip and fall hazards, and more.
Of course, your insurance won’t cover everything. This is why your tenants need to have their own insurance policies. The first thing that you should insist on them having is renter’s insurance. This type of insurance covers only the items in their apartments, such as their furniture, books, electronics, and more. If the apartment should catch fire or flood, your insurance will pay for the damage to the building, but not the tenant’s belongings. This is why they need to have their own insurance policy. Renter’s insurance also provides your tenants with some liability coverage. This coverage would kick in if someone gets hurt in one of your tenant’s apartments. For example, if one of their guests trips over something on the floor and breaks their leg, the tenant’s insurance is the one that will pay for medical expenses and other things, not yours.
Have Questions? Contact Charlotte Insurance
Want to learn more about renters’ insurance or tenant liability policies? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan you need.