In a recent survey, more than half a million business in the U.S. were found to be directly involved in apartment rentals. This accounts for approximately $163 billion in revenue. The number of investors is expected to continue growing for the foreseeable future.

The average investor looks at three crucial details when considering a property, the same three things insurance companies look at. The list includes renter demographics, staffing plans, and the environment in which the property sits. But they look at them from a very different angle when you’re talking about habitational insurance. Consider these tips given by professionals in the insurance industry.

Many investors are tempted to use their own employees to provide on-site security. To be sure insurance companies factor this type of security into their risk assessment, but they also consider where the employees came from and whether or not they are armed. While most insurance companies like the idea of on-site security, those who use their own employees are thought to be a higher risk than those who chose to hire a third-party security company. As a broker, your job is to assist your clients in making the right decision about the proper security.

Investors frequently turn to property managers, especially if they have more than one property. Having the property management company procure their own liability insurance is always a wise idea. But your clients should also be advised to purchase “gap” insurance to protect themselves in the event of a settlement that exceeds the property management company’s coverage.

Specific renter demographics come with their own types of risks. This list might include student housing and nursing homes/assisted living facility. For example, there are over 15,000 fatalities caused by slip fall accidents in senior living facilities costing an estimated $34 billion each year. Costs like these, fall under the umbrella of habitational insurance coverage.  Similar figures appear in college dorms for sexual assaults, aggravated assaults, and more.

In the event the property owner/manager is found to have been negligible, then he is expected to pay the costs. From the insurance company’s point of view, it may be less expensive to pay out than to fight the claim. This is why factors such as crime or the number of slip-fall accidents are factored into the calculation of rates.

Many carriers add a “habitability” exclusion to this type of policy. In general, this exclusion states that if the owner fails to maintain the property in a sanitary, safe, and habitable condition, the insured is not covered for any property damage or injury. A perfect example of failing to keep a rental unit livable: in the past year American consumers made over 900,00 calls to pest control companies regarding bed bugs. The bulk of these calls came from people living in apartments and condominiums.

Crime is one of the biggest concerns when determining a property’s risk factor. Even if a property scores well in all other areas of risk, but the crime score is high, insurance carriers are going to rate the property as “high risk.”

Insurers who issue habitational insurance coverage take into account a number of factors that can cause both coverage and pricing to vary.  The job of a broker is to ensure their customers are aware of the risks they may face and to help them find an insurance provider who can provide them with a custom-tailored insurance package. At the same time, when faced with a client who is concerned with cost, the broker should be able to help them understand that paying a little more for better coverage will ensure all losses are covered, which could save them significantly in the future.

Flow Insurance Services knows private habitaional insurance, and we know it well. Place your trust in us and let us help you to write more business. When it comes to growing your business, things can be challenging. Embrace the opportunity of habitational insurance!