Top Ways to Lower Your Multifamily Insurance Premium

Nate Jones, CPCU, ARM, CLCS, AU
2 days ago
2 min read

Rising construction costs, higher claim frequency, and increased litigation have pushed multifamily insurance premiums higher across the country. While coverage is essential, apartment owners still have options to reduce costs without creating dangerous coverage gaps.

The key is understanding how insurers evaluate risk—and how to improve your property’s insurance profile.

1. Increase Deductibles Strategically

One of the fastest ways to reduce multifamily insurance premiums is by increasing deductibles.

Higher deductibles mean:

Lower annual premiums
Fewer small claims impacting loss history

2. Improve Property Maintenance and Documentation

Insurers closely evaluate maintenance practices for multifamily rental insurance.

Risk-reduction improvements include:

Regular plumbing inspections
Roof and gutter maintenance
Electrical system upgrades
Documented preventative maintenance programs

The National Apartment Association notes that properties with strong maintenance records often qualify for more favorable underwriting terms.

3. Install Safety and Loss-Prevention Systems

Loss prevention plays a major role in determining multifamily insurance rates.

Consider installing:

Central fire alarm and sprinkler systems
Water leak detection and automatic shut-off valves
Security cameras and controlled access systems

The National Fire Protection Association reports that sprinklered apartment buildings experience significantly lower fire losses.

4. Bundle Policies and Work With One Carrier

Placing multiple coverages with one insurer can lower overall costs. Many carriers offer discounts when you bundle:

Property insurance
General liability
Umbrella liability
Equipment breakdown

Bundling can also simplify claims handling and renewals for multifamily owners.

5. Review and Update Coverage Limits Annually

Over-insuring or under-insuring can both increase costs.

Annual reviews ensure:

Replacement cost values are accurate
Liability limits align with current exposure
Rental income coverage reflects actual rents

The Insurance Information Institute recommends reviewing coverage limits regularly to avoid premium waste.

6. Reduce Claims Frequency

Frequent small claims can raise multifamily insurance premiums dramatically.

Ways to reduce claims include:

Handling minor repairs out-of-pocket
Educating tenants on maintenance reporting
Addressing issues before they escalate

Insurers reward properties with clean loss histories.

7. Add an Umbrella Policy Instead of Raising Base Limits

Increasing base liability limits can be costly. In many cases, adding an umbrella liability policy provides higher protection at a lower cost per dollar of coverage.

Umbrella policies are especially valuable for apartment buildings with high tenant density and common areas.