50 key terms every apartment owner should understand about their insurance program.
Actual cash value is the replacement cost of a property or item minus depreciation, reflecting its current worth at the time of loss rather than the cost to replace it new.
An additional insured is a person or entity added to a liability insurance policy who receives coverage for claims arising from the named insured's operations or premises.
An admitted carrier is an insurance company licensed and regulated by the state department of insurance, with policies backed by the state guaranty fund in case of carrier insolvency.
The aggregate limit is the maximum total amount an insurance policy will pay for all covered claims during the entire policy period, typically one year.
An agreed amount endorsement waives the co-insurance penalty by establishing a property value mutually agreed upon by the owner and insurer for the policy period.
Assault and battery coverage provides liability protection for claims arising from violent incidents on the property, which are often excluded or sublimited in standard general liability policies.
A blanket policy provides a single coverage limit that applies across multiple buildings or locations, rather than assigning a separate limit to each individual structure.
Builders risk insurance covers a building under construction or renovation against property damage from covered perils until the project is completed and a permanent policy takes over.
Business income coverage replaces income lost and pays continuing expenses when a business cannot operate due to a covered property loss, similar to loss of rents for apartment properties.
A certificate of insurance is a standardized document that provides proof of coverage to third parties, summarizing the policy types, limits, and effective dates.
A co-insurance clause requires the property owner to insure the building for at least a specified percentage of its replacement cost, typically 80%, or face reduced claim payouts.
Commercial umbrella insurance provides additional liability limits above the underlying general liability, auto liability, and employers liability policies, and may broaden coverage beyond the underlying terms.
A deductible buydown is an endorsement that reduces the standard deductible for a specific peril, such as wind/hail, in exchange for an additional premium.
DUS is Fannie Mae's multifamily lending program that delegates underwriting authority to approved lender partners who share risk on the loans they originate.
EPLI covers employers against claims by employees alleging wrongful termination, discrimination, harassment, retaliation, or other violations of employment law.
Equipment breakdown coverage pays for repair or replacement of mechanical and electrical equipment that fails due to internal causes, which standard property insurance does not cover.
The excess and surplus lines market consists of insurance carriers that are not admitted in a state but are authorized to write coverage that admitted carriers are unwilling to provide.
Excess flood insurance provides flood coverage above the limits of the NFIP policy, allowing apartment buildings to insure their full replacement cost against flood damage.
Excess liability insurance provides additional limits above an underlying policy, following the same terms and conditions of the underlying coverage without broadening protection.
The experience modification rate is a multiplier applied to workers compensation premiums that reflects the employer's historical loss experience compared to the industry average.
Fair housing laws prohibit discrimination in housing based on protected characteristics such as race, color, religion, national origin, sex, familial status, and disability.
A garden-style apartment is a low-rise residential building, typically two to three stories, situated in a campus-like setting with surface parking and outdoor access corridors.
Habitational insurance is a category of commercial insurance that covers residential rental properties including apartments, condominiums, and other multi-tenant dwelling structures.
A high-rise apartment building is ten or more stories tall, constructed with steel and concrete, and equipped with multiple elevators and advanced fire suppression and life safety systems.
The indemnity period is the maximum length of time for which a business income or loss of rents policy will pay claims following a covered loss, typically twelve to twenty-four months.
Loss of rents coverage reimburses the apartment owner for rental income lost when units become uninhabitable due to a covered property damage event.
A loss payee is a party named on an insurance policy to receive claim payment proceeds, typically the mortgage lender whose financial interest in the property must be protected.
A loss run is a detailed claims history report provided by the insurer showing all claims filed against a policy over a specified period, typically five years.
LIHTC is a federal tax credit program that incentivizes private investment in affordable housing by providing tax credits to developers who build or rehabilitate qualifying apartment properties.
A master policy is a single insurance program that covers all properties in an owner's portfolio under one set of coverage terms, renewal dates, and administrative procedures.
A mid-rise apartment building is typically four to nine stories tall, featuring elevator access, enclosed interior corridors, and either structured or podium parking.
A mortgagee clause names the lender on the property insurance policy and provides the lender with certain protections, including the right to receive claim payments and notice of cancellation.
The named insured is the person or entity identified on the policy declarations page as the policyholder, with full rights and obligations under the insurance contract.
A named storm deductible is a separate, typically percentage-based deductible that applies to property damage caused by hurricanes and tropical storms designated by the National Weather Service.
The NFIP is a federal program administered by FEMA that provides flood insurance to property owners in participating communities, with coverage limits of $500,000 per commercial building.
Optigo is Freddie Mac's multifamily lending network of approved seller/servicers that originate and service apartment loans under Freddie Mac's guidelines.
Ordinance or law coverage pays the additional cost of complying with current building codes when repairing or rebuilding a property after a covered loss.
Per-door cost is a metric that divides the total insurance premium by the number of units in the property, used for budgeting and benchmarking apartment insurance expenses.
The per-occurrence limit is the maximum amount an insurance policy will pay for a single covered event or claim, regardless of how many claimants or damaged items are involved.
A portfolio program is a coordinated insurance placement that covers multiple apartment properties under a unified structure, leveraging diversification to achieve better terms.
Rate adequacy refers to whether insurance premiums are sufficient to cover expected losses, expenses, and profit margins for a given class of business or individual risk.
A reinsurance treaty is a contract between an insurance carrier and a reinsurer that transfers a portion of the carrier's risk, affecting the carrier's capacity and pricing for apartment coverage.
Replacement cost value is the amount needed to repair or replace damaged property with materials of similar kind and quality at current prices, without deducting for depreciation.
A scheduled policy assigns a specific coverage limit to each individual building or location, with claims at each site capped at that building's designated amount.
Special form coverage protects against all causes of loss except those specifically excluded in the policy, providing broader protection than a named-peril policy.
A sublimit is a coverage cap within a policy that is lower than the overall policy limit, applying to a specific type of loss such as water damage, mold, or sewer backup.
The total insured value is the full amount of coverage on a property insurance policy, representing the maximum the insurer will pay in the event of a total loss.
A vacancy clause modifies or restricts insurance coverage when a building has been unoccupied beyond a specified period, typically 60 consecutive days.
A waiver of subrogation is a policy endorsement that prevents the insurer from seeking recovery from a specified third party after paying a claim, even if that party was at fault.
A wind/hail deductible is a separate deductible, often percentage-based, that applies to property damage caused by wind and hail events, distinct from the standard property deductible.