Property insurance for multi-family dwellings like apartments is a major expense that all property owners must anticipate in order to keep their properties well covered against all potential risks.
Fortunately, multi-family property insurance agencies do suggest a number of ways that property owners can reduce their premiums, mainly by understanding how this insurance works in comparison to both residential and commercial policies.
If you own a multi-family unit and want to insure it as economically as possible, talk to your insurance agent about any of these three methods for reducing the premium while maintaining suitable coverage.
1. Correct Property Valuation
Before investing in any multi-family property insurance policies, it is critical that the property be correctly valued.
According to property insurance agencies, there is a big difference between the market selling value of a property and the cost of making it whole again after a loss.
As such, owners must insure based on repair or replacement value, as insuring based on market value can leave owners with a huge financial loss if the property is severely damaged.
At the same time, it is essential that property owners work closely with multi-family dwelling insurance agents on monitoring repair and replacement costs rather than just over-insuring to cover these costs.
Things like land value, building costs, and other factors that determine market value must be taken into consideration and not loan balances ;to calculate a good property insurance rate without paying too much extra due to a poor understanding of what the repair or replacement costs would actually be.
2. Actual Risk for Property Portfolios
Although it might seem easier to insure a portfolio of multiple properties under one single multi-family property insurance policy, this may not be an economical method for doing so.
Considering the fact that each unit has its own property value and repair or replacement value as well as its own risk level based on location and other factors, covering all properties based on the higher risk levels is over-insuring those that do not face the same risk.
3. Policy Purchase Timing
Another area where owners of multi-family properties have some ability to reduce their insurance costs is with the right timing.
This involves some understanding and monitoring of the insurance market itself, although it is true that property insurance agencies do extend discounts and reduced prices on policies at certain times, especially at the end of the financial year.
There are instances where canceling a current policy and purchasing a new one from a multi-family dwelling agency before the end of the year can result in greatly reduced insurance costs.
Reduce Multi-Family Property Insurance Costs In Three Big Ways
With insurance for multi-family properties one of the larger expenses property owners will pay throughout the year, it is important to look for ways that premiums can be reduced.
Using these three methods, work with your property insurance agency to find a more cost-effective way to maintain the coverage you need without overpaying.
Contact an experienced multi-family insurance agent today who can help calculate competitive rates based on correct valuation, actual portfolio risk, and any agency deals or discounts to keep your premiums as low as possible!