Older Apartment Buildings and Insurance Availability Issues
- Jun 1
- 5 min read
Older apartment buildings can be some of the most attractive investments in the multifamily space. They’re often located in established areas, offer strong cash flow potential, and provide clear opportunities for value-add improvements. But when it comes to securing the right apartment building insurance, age introduces a level of scrutiny that many owners underestimate.
At Wexford Insurance, we regularly work with investors who acquire older properties and are surprised when their insurance options are more limited — or more expensive — than expected. It’s not because carriers don’t want to insure these assets. It’s because age signals risk factors that must be carefully evaluated.
Nate Jones, CCPCU, ARM, CLCS, AU, founder of Wexford Insurance, explains it this way:
“In my experience as a former underwriting manager, building age isn’t the problem — it’s what age represents. Outdated systems, deferred maintenance, and unknown exposures are what underwriters are really pricing for.”
If you own or are considering purchasing an older apartment building, understanding how insurance carriers evaluate these properties is critical to protecting your investment.
Average Cost of Insurance for Older Apartment Buildings
Insurance costs for older apartment buildings vary widely depending on how well the property has been maintained and updated over time.
Here’s a breakdown of estimated annual ranges.
Estimated range: $2,000 – $9,000 annually
Covers tenant injuries and third-party property damage
Premium influenced by tenant density and property layout
Estimated range: $8,000 – $65,000+ annually
Covers fire, vandalism, certain weather events, and other property damage
Premiums increase with aging systems and higher perceived risk
Estimated range: $10,000 – $75,000+ annually
Bundles property and liability coverage
May include restrictions for older buildings depending on condition
Estimated range: $3,000 – $15,000+ annually
Covers on-site employees, such as maintenance staff
Not directly tied to building age
Water Damage and Roof Deductibles
Often higher for older buildings
May include specific sub-limits or exclusions
Umbrella Liability Insurance
Estimated range: $2,000 – $12,000+ annually
Provides additional liability protection above primary policies
Strongly recommended for properties with higher exposure
At Wexford Insurance, we’ve seen that two buildings of the same age can have dramatically different insurance costs — depending on documentation, upgrades, and maintenance history.
What Factors Affect Insurance Costs for Older Apartment Buildings
Age alone does not determine insurability — but it drives several key underwriting factors.
1. Electrical, Plumbing, and HVAC Systems
Outdated systems are one of the biggest concerns for carriers.
Common issues include:
Knob-and-tube or aluminum wiring
Galvanized or aging plumbing systems
Older HVAC units prone to failure
In Nate Jones’s experience as a former underwriting manager:
“Most carriers aren’t worried about the year the building was built — they’re worried about the last time the systems were upgraded.”
2. Roof Age and Condition
Roofing is another major factor.
Older roofs often lead to:
Coverage limitations
Actual cash value (ACV) settlement instead of replacement cost
Higher deductibles
3. Maintenance History and Documentation
At Wexford Insurance, we have seen firsthand that well-documented buildings perform better in underwriting — even if they are older.
Carriers want to see:
Inspection records
Repair logs
Capital improvement history
4. Prior Claims Activity
Older buildings tend to have:
More frequent water-related losses
Increased risk of fire losses
Ongoing maintenance-related claims
A consistent pattern of small claims can significantly impact renewal terms.
5. Construction Type
Materials matter.
Brick or masonry may age better
Wood-frame construction may carry higher fire risk
Older designs may lack modern safety features
6. Deferred Maintenance
This is one of the biggest hidden risks.
Properties with:
Aging infrastructure
Incomplete repairs
Lack of preventative maintenance
often face limited market options.
Insurance Requirements for Older Apartment Buildings
Insuring older properties often involves more detailed underwriting requirements than newer buildings.
System Upgrade Expectations
Carriers may require:
Updated electrical systems
Modern plumbing materials
Functional HVAC systems
These upgrades are sometimes mandatory to bind coverage.
Inspection Requirements
Many policies include:
Pre-binding inspections
Ongoing inspection requirements at renewal
Failure to address inspection findings can lead to non-renewal.
Protective Safeguards
Policies may require:
Working smoke detectors
Fire alarms or sprinkler systems
Maintenance verification
If safeguards are not maintained, claims can be denied.
Replacement Cost vs Actual Cash Value
Older buildings may be subject to:
Actual cash value payments for certain systems
Reduced claim payouts based on depreciation
Understanding Property Risk
Organizations like the Insurance Information Institute explain how building condition impacts underwriting decisions:https://www.iii.org
Additionally, the National Fire Protection Association provides guidance on fire risks in older buildings:https://www.nfpa.org
Common Mistakes Owners Make With Older Apartment Insurance
These issues come up frequently during policy reviews.
Assuming Age Doesn’t Matter
Even well-maintained older buildings face increased scrutiny.
Failing to Document Upgrades
Without documentation, carriers assume systems are original or outdated.
Waiting Until Renewal to Address Issues
Problems identified late can limit your carrier options.
Underinsuring the Property
Older buildings are often undervalued, creating gaps in coverage.
Ignoring Small Claims Trends
Frequent minor losses can damage your underwriting profile over time.
How to Lower Your Older Apartment Insurance Costs
There are proactive steps you can take to improve insurability and manage costs.
Maintain detailed records of all upgrades and renovations
Replace aging systems before they reach failure points
Conduct regular inspections of roofs, plumbing, and electrical systems
Address minor maintenance issues promptly
Implement a long-term capital improvement plan
Review insurance annually instead of waiting for renewal
Work with an independent agency that can access specialized carriers
At Wexford Insurance, we’ve helped apartment owners reposition older buildings in the insurance marketplace simply by organizing documentation and proactively addressing key underwriting concerns.
FAQ: Older Apartment Building Insurance
Why is insurance harder to obtain for older buildings?
Older buildings often have outdated systems and higher risk of claims, which leads to stricter underwriting.
Does upgrading systems improve insurance options?
Yes. Updated electrical, plumbing, and roofing systems can significantly improve both pricing and availability.
What is actual cash value coverage?
It pays for losses based on depreciated value rather than full replacement cost — often applied to older systems.
Do inspections affect coverage?
Absolutely. Inspection findings can lead to required repairs or even policy non-renewal if not addressed.
What are the most common claims in older buildings?
At Wexford, the most common issues involve water damage from aging pipes and roof-related leaks.
Why Apartment Owners Choose Wexford Insurance
Insuring older apartment buildings requires more than just submitting an application — it requires presenting the property correctly to the insurance marketplace.
Wexford Insurance is an independent agency, meaning we represent multiple carriers and can match your property with the right underwriting appetite. This is especially important for older buildings, where not every carrier is willing to compete.
At Wexford Insurance we recently helped an investor acquire an older apartment complex that initially had very limited insurance options due to outdated system documentation. By working with the ownership group to clarify upgrade history and present the risk properly, we were able to expand their carrier options and improve coverage structure.
Our approach is led by Nate Jones, CPCU, ARM, CLCS, AU — a graduate of Indiana State University in Insurance and Risk Management and a former underwriting manager who understands how carriers evaluate these risks. Alongside experienced team members like Kyle Starnes and Crystal Reeves, we bring practical underwriting insight to every account.
As a Trusted Choice independent agency, our goal is to give you transparent options and help you make informed decisions that protect your investment long-term.
Get an Insurance Review for Your Older Apartment Building
Older apartment buildings can be strong long-term investments — but only if your insurance program supports your risk profile.
If you own or are acquiring an older property, now is the time to review your coverage, identify potential gaps, and make sure your policy reflects the true condition of the building.
Our office address is107 N State Road 135, STE 304, Greenwood, IN 46142
Call 317-942-0549 or visit www.wexfordins.com. We will compare multiple carriers and help you secure the right protection at the best possible price.
