California Apartment Building Insurance Is One Call Away!
If you own apartment buildings and are looking for better options Ishtar Insurance Services can help you find the coverage you need to protect your real estate investment.
Call 818-728-1246 or toll free 1-800-684-5661 or click on Insurance for Apartment Buildings Van Nuys to submit your information to us online.
We offer highly competitive apartment building insurance programs for real estate investors throughout the state of California.
If you predominantly own single-family rental units click on Landlord Insurance Van Nuys California for more information.
What Coverage Is Necessary for Apartment Building Owners?
The coverage you might likely be interested in exploring first is coverage on your buildings and business personal property. It’s important to choose the amount of coverage wisely to take into consideration the cost to rebuild, especially if a coinsurance provision is included in your policy.
What is Coinsurance?
Coinsurance is a condition insurance companies in some cases require to encourage real estate owners to purchase adequate coverage on the properties they own.
In reality a coinsurance provision could become a significant penalty that would be applied on property losses when the building owner fails to purchase adequate insurance protection.
The Coinsurance Penalty.
Thomas Morgan owns a small apartment building complex. He purchases an apartment building insurance policy and the company includes an 80% coinsurance clause.
Thomas is required to purchase at least 80% of the required coverage to be fully reimbursed for claims on his apartment building.
A severe windstorm causes $65,000 for the damages to his apartment building and he submits a claim to his insurance company.
At the time of the loss the apartment building is valued at $2 million.
That would require Thomas to purchase at least $1,600,000 to receive full value on his claim.
However to save money Thomas decided to only purchase $1million because that’s what he paid for his apartment building.
Because Thomas did not purchase the full value required he will be penalized. What will he pay in terms of the penalty on his $65,000 claim?
To calculate his coinsurance penalty we divide the amount of coverage he purchased by the amount of coverage he was required to purchase.
$1,000,000 divided by $1,600,000 = .625
Thomas’s insurance company is only required to pay around 63% of the claim so Thomas will share in the loss by paying $24,375 + his $5,000 deductible for a total of $29,375!
If the apartment building suffered a $500,000 claim Thomas would have needed to pay out of pocket almost $200,000 because he did not properly insure his apartment building!
As you can see it’s vitally important to purchase the correct amount of property insurance to minimize a significant out-of-pocket expense.
Call Us When Shopping for Apartment Building Insurance in Van Nuys!
We can help you find the coverage you need. Licensed agents are standing by to accept your call.
Our office number is 818-728-1246 or 1-800-684-5661 if calling long-distance.
Additionally you can submit your information to us online by clicking California Apartment Building Insurance Quotes.
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