Multi-Unit Property Insurance Strategy
Insurance requirements and costs increase significantly as properties grow from single-unit to multi-unit buildings. Understanding these differences is crucial for investment planning.
2-4 Unit Buildings
2-4 unit properties are still classified as residential. They require modified landlord policies that account for multiple tenants. Coverage must address shared common areas and systems.
5+ Unit Properties
Properties with 5+ units typically require commercial general liability insurance in addition to property coverage. This is more expensive than residential landlord insurance.
Common Area Liability
Liability coverage must account for common areas: hallways, stairs, parking lots, lobbies. Injuries in common areas create higher liability exposure than single-unit properties.
Systems and Infrastructure
Multi-unit properties have complex shared systems: HVAC, plumbing, electrical, roofing. Boiler and machinery insurance becomes more important with multiple units depending on central systems.
Loss of Rental Income by Unit
Loss of income coverage becomes complex with multiple units. Some units may be affected while others remain tenanted. Coverage should address partial income loss.