What is Habitational Insurance?
Habitational insurance is a type of insurance policy that multifamily property owners need to protect their investment. This type of policy covers the physical structure of the building and any common areas that residents use. It can also protect against liability claims that may arise from injuries on the property.
Habitational insurance is uniquely packaged for property owners in that it protects the owner of the property and the residents who rent there. Condominiums, apartments, townhomes, and even some vacation rentals are examples of properties covered by a habitational insurance policy.
These policies protect real estate investors and property owners on three tiers. The first is the property itself, which is protected from physical damage. The second tier is the income associated with the property, which is covered if the property becomes uninhabitable and you cannot collect rent. The third tier of protection is for liability if someone is injured on your property and decides to sue you.
Let’s look at each one in a bit more detail.
Property Insurance
Property insurance protects the actual property. This insurance protects your property investment from natural weather-related causes and fires, explosions, and burglary or theft. Property insurance can be split up to cover each piece of property or as a single unit with whole-property insurance.
Rental Income or Business Income Insurance
Loss of rents insurance, also called business interruption insurance, is there to help you if your property becomes uninhabitable and you cannot collect rent. This policy reimburses you for a certain amount of lost rental income while making repairs.
General Liability and Umbrella Liability Coverage
If someone is injured on your multifamily property, general liability insurance can help pay for their medical expenses and any legal fees that may arise from the incident. However, general liability insurance can often have limited coverage. An umbrella liability policy will provide an extra layer of protection, covering you for claims that may exceed the limits of your general liability policy.
Both small and large commercial clients need high-caliber insurance options from knowledgeable professionals, and that is what Merit Insurance Services offers. Merit Insurance has been in business for more than two decades and provides full-service brokerage and consulting services. Contact us for more information on habitational insurance options for your investments.
