Multi Family Dwelling Insurance
Multi family dwellings are different from traditional properties because they are a single entity rather than several detached units. For insurance purposes, multi family dwellings are dwellings capable of housing more than one family with multiple bathrooms, kitchens, and bedrooms with a separating wall between them. This can be a duplex, four-plex, apartment, condominium, or townhouse.
Insuring your multi family dwelling is a bit trickier than other commercial properties may be, which is why it’s a good idea to work with an independent insurance agency, like Insurance Center of North Jersey. We bring more than 80 years of experience serving the needs of New Jersey property owners to the table and can help you make sure you get the right amount of coverage to protect your interests.
Owner Occupied or Non-owner Occupied Multi Family Dwellings
The insurance rules are different depending on whether you live on the property or not. If you live on the property, then you will need to insure the property as your home – meaning you will need a standard homeowner’s insurance policy. If you do not live on the property and it is merely an investment property, then you will need a dwelling and fire policy and perhaps a business owner’s policy (this will cover the loss of rental income while repairs are being made to the property should a covered event take place).
The policy for homeowners will cover the structure of the property, personal liability, and coverage to replace personal property lost in a covered event. Additionally, the policy covers loss of use, allowing you to pay for alternative housing while yours is being repaired or rebuilt.
A dwelling and fire policy covers the structure only and provides an agreed upon amount for coverage of additional structures on the property as well as fair rental value to help replace your lost income while repairs are being made.
Some dwelling and fire policies cover personal liability, but that isn’t the case with all policies. We will work with you to help you determine how much personal liability coverage you’re comfortable with and how to arrange the best coverage for the best price to meet your needs.
Mitigating Factors that Impact Multi Family Property Insurance Costs
The insurance costs for multi-family properties can be mitigated by certain factors. These are some of the factors that can have a negative or positive effect on your insurance quotes:
- Age of the property. Newer properties are often in a better state of repair and more likely to meet local code requirements than older properties. This means that repairs are likely to be less expensive in the event of a covered event.
- Age and type of wiring on the property. Old or outdated wiring is not only bad for modern electronics; it also represents a significant risk of causing fires or shocking residents and/or their guests.
- Construction type of the home. Brick and stone structures are sturdier and less likely to sustain substantial damage from wind and hail than wooden structures – especially older wooden structures that pre-date modern construction codes.
- Firewalls. While most people think of firewalls as something related to computers, they have a far more important function in multi family housing – providing a layer of protection from fire damage between units. The existence of a firewall offers added protection and that is something insurance companies like to see.
- Neighborhood. Insurance companies prefer neighborhoods with low crime rates as well as those that are largely owner occupied.
- Owner Occupied. Insurance companies believe that owner occupied properties are going to be a better investment because owners who live onsite are going to take better care of their properties than the average tenant will.