Underwriting Guide
What Underwriters Ask About Apartment Buildings
Apartment building owners face significant premises liability from tenant injuries, substantial property exposure from the building itself, and liability from lead paint, mold, and building code compliance issues. Underwriters focus on the building's age and condition, the owner's management experience, and the geographic location's natural hazard exposure.
Commercial PropertyGeneral LiabilityWorkers' CompensationCommercial UmbrellaFloodEarthquake
Property Details
How many units does the building contain?
Why they ask: Unit count is a primary GL and property rating factor. Buildings over 5 units are typically ineligible for homeowners policies and require commercial coverage.
What is the year the building was built?
Why they ask: Older buildings have higher property risk from outdated electrical, plumbing, and roofing systems. Buildings pre-1978 require lead paint disclosure.
What is the construction type — frame, masonry, fire-resistive?
Why they ask: Construction type is one of the most important property rating factors. Wood-frame buildings have significantly higher fire risk than masonry or concrete.
What is the replacement cost value of the building?
Why they ask: Property coverage must reflect actual replacement cost — not market value or purchase price. Underinsurance is the most common problem on apartment buildings.
When was the roof last replaced?
Why they ask: Roof age and condition directly affect property rates and eligibility. Many carriers decline buildings with roofs over 20 years old.
What is the condition of the electrical, plumbing, and HVAC systems?
Why they ask: Outdated systems (knob-and-tube wiring, galvanized plumbing, cast-iron pipes) increase fire and water damage risk.
Operations & Tenants
Are tenants required to carry renters insurance?
Why they ask: Tenant renters insurance reduces the building owner's GL and property exposure by providing a buffer for tenant-caused losses.
Does the owner self-manage or use a property management company?
Why they ask: Professional management companies typically have better maintenance protocols and documentation, which reduces liability exposure.
Are there any Section 8 or income-based housing units?
Why they ask: Some carriers restrict or exclude subsidized housing due to perceived higher liability and maintenance cost exposure.
Is there a swimming pool, gym, or other amenity?
Why they ask: Pools and fitness areas significantly increase premises liability. Pools require proper fencing, signage, and operating procedures.
Is the building located in a flood zone?
Why they ask: Flood insurance is not included in standard commercial property policies. Buildings in FEMA flood zones A or V require separate flood coverage.
Loss History
Provide 5 years of property and GL loss runs.
Why they ask: Water damage, slip-and-fall, and fire claims are the most common losses on apartment buildings. Frequency is as important as severity.
Have there been any lead paint or mold claims?
Why they ask: Lead and mold claims are significant environmental liability exposures on older buildings. Prior claims can result in declination.
Have there been any tenant lawsuits in the past 5 years?
Why they ask: Tenant suits (habitability, wrongful eviction, discrimination) indicate management issues and predict future EPLI and GL losses.
Answers that raise red flags
⚠Buildings with roofs over 20 years old or in significantly deteriorated condition
⚠Prior lead paint or mold claims without remediation documentation
⚠Buildings in flood zones without flood insurance
⚠Swimming pools without proper fencing and safety signage
⚠Multiple water damage claims from plumbing failures
⚠Tenant lawsuits for habitability conditions — indicates deferred maintenance
Tips for presenting this risk favorably
✓Conduct a replacement cost estimator analysis before submitting — do not use purchase price or market value as the building limit
✓Document recent capital improvements: roof, HVAC, electrical, and plumbing upgrades
✓Include information about the property management company and their procedures
✓Confirm whether flood coverage is needed and obtain a FEMA elevation certificate for buildings in flood zones
✓If the building pre-dates 1978, confirm lead paint disclosure requirements and any prior testing results
Collect all this information automatically
AgencyAssist sends your client a plain-English intake link and maps every answer to the correct ACORD fields — including all the questions above.