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Common Apartment Loss Problems

Multi-Family Complexes: (Apartment and Condo) An In-Depth Look at Insuring the Many Exposures and Losses

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• prevent easy access for toddlers. Pool rules should be prominently posted and enforced. The rules should be reasonable to discourage users from flouting or ignoring them, but should make clear that certain practices are hazardous and at user's risk. Lifeguards may be called for and their hours clearly posted. Adequate pool maintenance should be provided to avoid exposure to possible disease or contamination.

7. As liability (and workers compensation, though probably not a significant factor for this coverage for most apartments) insurance premiums get larger, opportunities for premium savings increase as well. But unlike property insurance which is schedule-rated, these coverages are experience-rated, with debits or credits offered from the "manual" rates for each business category based on the losses paid measured against premiums earned over the previous rating period (usually either three or five years prior to the last year). So the best way to control this cost is through vigorous safety practices.

Attend promptly to such things as adequate lighting both inside in the hallways and stairwells and outside around parking lots and entrances; repair of deteriorated carpets, sidewalks, and driveways; installation of anti-slip materials on stairs, in lobbies, hallways, and showers or bathtubs; effective elevator, fire protection equipment and alarm maintenance; and the many other things that a competent safety engineer can recommend.

If security personnel are used, be sure that they are properly trained and supervised. Be wary of overselling the value of such services to the residents. There are numerous cases of assault, rape or robbery of residents by outsiders where the residents were able to recover from the apartment owners for failure to maintain adequate security promised by the owners. Nor are condo or co-op apartment management immune from such exposures. It has long been established in courts that unit owners or co-op residents, even though co-owners of the apartment complex, have the right to sue the owners in common and their association or management for bodily injury or property damage due to their alleged negligence.

Additional Occupancies Sometimes Encountered
Many apartment complexes, especially in central city locations, will have non-residential exposures not considered in detail above.

Among them are parking garages, sometimes for residents' and visitors' use only, sometimes public garages; retail stores where housekeeping can present problems; restaurants with cooking and exhaust vent hazards; and dry cleaners with potentially hazardous or flammable materials in use. Space does not permit a detailed examination of these exposures here, but they should be taken into account and analyzed for their possible impact on the apartment ownership, whenever encountered.

Common Apartment Loss Problems
Among the many problems in loss adjustment commonly encountered in apartment losses are the following:

• Insufficient limits of property insurance to:
  1. cover the amount of the loss; or
  2. satisfy the coinsurance requirement of the policy. A common failing among