What is a certificate of insurance and when do apartment owners need one?

A certificate of insurance (COI) is a one-page summary document issued by your insurance company or agent that provides proof of your current insurance coverage. It lists the types of coverage in force, policy numbers, effective dates, coverage limits, and any additional insureds or special endorsements. The ACORD 25 (Certificate of Liability Insurance) and ACORD 28 (Evidence of Commercial Property Insurance) are the industry-standard certificate forms used across the insurance industry, published by the Association for Cooperative Operations Research and Development.

Apartment owners are frequently asked to provide certificates of insurance. Common situations include mortgage lender requirements (lenders require proof of coverage as a condition of the loan), property management agreements (management companies need to verify the owner's coverage), contractor and vendor requirements (before allowing work on the property), purchase or sale transactions (buyers and title companies need to verify coverage), and municipal or licensing requirements.

Certificates are informational only and do not modify the actual policy. They simply confirm that coverage is in place as of the date the certificate is issued. Most insurers and agents can issue certificates quickly, often within 24 hours of the request. If a certificate holder requires specific endorsements (such as additional insured status or a waiver of subrogation), those changes must be made to the underlying policy and then reflected on the certificate. Fannie Mae's Multifamily Selling and Servicing Guide (Part III, Chapter 6) and Freddie Mac's Multifamily Seller/Servicer Guide (Chapter 58) specify the certificate of insurance documentation that must be provided to the servicer at loan closing and each renewal.