Compare Multifamily Homeowners Insurance

Multifamily insurance helps protect your duplex, triplex, or fourplex and the people living in them. In the event of a loss, such as an accident, disaster, or theft, multifamily insurance helps cover the costs to repair or replace what was damaged. If someone is injured in your multifamily property, it can also protect you from being held liable. Note that if your building is larger than four units, then you will likely need commercial insurance.

Learn more about multifamily insurance and compare your options below.

Do I Need Multifamily Insurance?

Multifamily homes can have more hazards than a single-family home.

Stairways, elevators, and more complex wiring and plumbing all increase the risk for multifamily homes. Add the fact that more units mean more people and more possessions, it quickly becomes apparent why duplexes, triplexes, and fourplexes have unique insurance needs.

How Does Multifamily Insurance Work?

How multifamily insurance works depends on how you use your duplex, triplex, or fourplex.

Do you live somewhere else and rent all the units out? Or do you live in one unit and rent the other(s) out? Perhaps only you and your immediate and extended family are the only ones living on the property?

Essentially, whether you are a landlord or not will determine your multifamily insurance needs.

Landlord Insurance

If you rent out the units in your duplex, triplex, or fourplex, you will need landlord insurance. Also known as rental or investment property insurance, landlord insurance can financially protect you and your multifamily property in the event of a peril, such as theft, vandalism, accident, or disaster.

There are three types of landlord coverage, referred to as dwelling policies (DP):

• DP1: It is the most basic type of coverage. DP-1 covers nine perils, including damage from fires, smoke, lightning, wind, hailstorms, and riots. Replacement costs are calculated based on depreciated value.
• DP2: Covers 18 perils, including those in DP-1, with the additions of theft, malicious mischief, falling objects, and frozen pipes. Payouts are calculated based on the full cost to replace what was damaged.
• DP3: The most comprehensive of the three dwelling policies. It covers all perils, except for those explicitly excluded by the insurance company.

Here is a comparison of covered perils:

The perils typically excluded with DP3 coverage are:

• Earthquakes
• Flooding
• Water backup
• Mold
• Power failure
• War or nuclear hazards
• Intentional loss or neglect
• Upgrades required by law

What Does Landlord Insurance Cover?

In the event of damage, landlord insurance can help pay to repair or replace your property. If the damage renders your property unlivable, landlord insurance can also include loss-of-use coverage, which will reimburse you for lost rental income and could also reimburse your tenants for hotel and living expenses. And if someone is injured on your property, landlord insurance can financially protect you by providing personal liability coverage, which can pay for resulting legal and medical fees.

As a landlord, keep in mind that you do not need to cover the personal property of your tenants. Tenants can purchase renters insurance for this purpose. If you keep any tools, appliances, or other items in your multifamily unit, you can protect your possessions with personal property coverage.

Here is a comparison of coverage for each type of dwelling policy:

Multifamily Insurance for Live-In Landlords

If you live in one of the units of your duplex, triplex, or fourplex, while renting out the others, you may be able to purchase homeowners insurance instead of landlord insurance.

Known as an HO-3 policy, the coverages works the same way as homeowners insurance for a single-family home. What that means is the entire structure of your property, including common areas, will be covered in the event of an accident, theft, disaster, or other qualified peril. Your personal belongings will also be covered. The possessions of your tenants, however, will not be covered. They must purchase their own renters insurance.

Not every home insurance company offers an HO-3 policy for owner-occupied multifamily properties. When comparing multifamily insurance quotes, it is also a good idea to ask your agent about personal liability coverage. Personal liability coverage shields you from legal and medical fees in the event someone is injured on your multifamily property. Generally, the more tenants you have, the higher coverage amounts you will need.

Multifamily Insurance Without Tenants

If you live in your multifamily property but do not have any occupants who pay you rent, then you can get a typical homeowners insurance policy.

Home insurance policies for duplexes, triplexes, and fourplexes without tenants usually include:

• Dwelling coverage
• Personal property coverage
• Personal liability coverage

Multifamily home insurance without tenants typically covers the following perils:

• Fire and smoke damage
• Civil unrest damage
• Car and aircraft damage
• Theft and vandalism damage
• Damage from explosions
• Damage from lightning
• Damage from volcanoes
• Damage from heavy wind or hail

Keep in mind that you usually need to purchase separate policies to be covered from earthquakes, floods, and, depending on where you live, wildfires.

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