Quick Answer: Apartment building insurance is a commercial program for multifamily owners. It combines property coverage on the building, general liability for tenant and visitor injuries, and loss of rents, usually with equipment breakdown, ordinance or law, and an umbrella. In our own quoting of Illinois apartment buildings, a 5 to 10 unit building runs $4,500 to $9,500 a year and a 26 to 50 unit building $14,000 to $35,000. Your lender sets much of the program.
What Apartment Building Insurance Covers
Building and Property
Covers the structure, common areas, and the owner's contents against fire, wind, water, and other covered losses. How the building is valued decides how a claim is paid.
General Liability
Helps address claims from a tenant or visitor who is hurt on the property: a fall on the stairs, ice in the parking lot, a railing that gives way.
Loss of Rents
Replaces rental income while units cannot be lived in after a covered loss, so the mortgage and operating costs keep getting paid during repairs.
Equipment Breakdown
Covers sudden failure of boilers, central heating and cooling, elevators, and electrical systems, which a property policy alone usually does not.
Ordinance or Law
Helps pay the added cost of rebuilding an older building to current code after a covered loss. A lender can require it when a building no longer conforms to current zoning.
Commercial Umbrella
Adds liability limits above the general liability policy. Fannie Mae asks for one, and the amount rises with the number of units.
Apartment buildings are one part of our habitational insurance practice. Own one to four unit rentals instead? See landlord insurance. Not sure which you need? Read landlord vs. habitational insurance.
Four Things to Check Before You Renew an Apartment Policy
Two apartment programs with the same building limit can pay very differently. The difference sits in the valuation, the deductibles, and the exclusions. These are the four points we check on every building.
Valuation and coinsurance. If the building is insured for less than the policy's coinsurance percentage of its replacement cost, even a partial loss can be paid short. An agreed value provision removes that penalty. Check the limit against today's construction cost, not the purchase price.
The roof, and the wind or hail deductible. Many carriers pay older roofs at actual cash value and apply a separate wind or hail deductible, often a percentage of the building limit. On a $4,000,000 building, a 2% deductible is $80,000. Know the number before the storm.
Water. Water claims are routine in apartment buildings. Sewer and drain backup is usually excluded unless it is added, and some policies set a separate deductible for each unit a water loss touches. Our guide to what habitational insurance covers goes through the rest.
Liability exclusions. Assault and battery, habitability, mold, and animal exclusions are common on apartment liability policies, and those are claims tenants bring. A lower premium can mean one of them was added. Read the exclusion list at every renewal.
Renewal is when the terms change
Deductibles and exclusions can change from one renewal to the next. Send us your current policy and we will show you what it says today, next to what the market is offering.
What a Lender Requires on an Apartment Building
Your loan documents set the floor for the program. Fannie Mae publishes its multifamily requirements, and many lenders follow terms close to them.
| Requirement | What the guide says | Source |
|---|---|---|
| Property coverage Section 501.02A |
Special perils coverage on a replacement cost basis, for at least 100% of the estimated insurable value of a single-building property and 90% of a multiple-building property. Roofs may be insured at actual cash value. | Fannie Mae Multifamily Guide, 501 |
| Coinsurance Section 501.02A |
The policy must have no coinsurance clause, or one that is offset by an agreed amount provision of at least 100% of the estimated insurable value. | Fannie Mae Multifamily Guide, 501 |
| Rental income Section 501.02D |
Business income coverage including rental value, on an actual loss sustained basis for 12 months or based on the property's most recent annual income. The waiting period can be no longer than 72 hours. | Fannie Mae Multifamily Guide, 501 |
| General liability and umbrella Section 503.02 |
At least $1,000,000 per occurrence and $2,000,000 general aggregate, plus an umbrella of $1,000,000 for up to 250 units, $2,000,000 for 251 to 500 units, and $3,000,000 for 501 to 1,000 units. | Fannie Mae Multifamily Guide, 503 |
| Ordinance or law Section 501.02E |
Required when the property does not conform to current land use law or ordinance. | Fannie Mae Multifamily Guide, 501 |
| Who is named Section 501.01A |
Fannie Mae is named as mortgagee and loss payee on the property policy and as additional insured on the general liability and umbrella policies. | Fannie Mae Multifamily Guide, 501 |
| On-site staff | Illinois requires employers to insure almost everyone they hire. An owner with a maintenance or management employee who knowingly goes without workers compensation can be fined up to $500 a day, with a $10,000 minimum. | Illinois Workers' Compensation Commission |
Fannie Mae requirements are from the Multifamily Selling and Servicing Guide, Part II, Chapter 5, effective September 28, 2026. They apply to loans Fannie Mae buys. Other lenders set their own terms, so read your loan documents. This is a summary for insurance planning, not legal advice.
Refinancing or buying? Send us the lender's insurance requirements before closing. We build the program to them and issue the evidence of insurance the lender asks for, so the insurance does not hold up the loan. Manage buildings for other owners? See property management insurance and our Property Management Partner Program.
What Apartment Building Insurance Costs
These ranges come from our own quoting of Illinois apartment buildings. They are not a national survey.
| Building size | Annual premium | Per unit, per year |
|---|---|---|
| 5 to 10 units | $4,500 to $9,500 | $500 to $1,100 |
| 11 to 25 units | $7,500 to $18,000 | $450 to $850 |
| 26 to 50 units | $14,000 to $35,000 | $425 to $750 |
| 51 to 100 units | $28,000 to $65,000 | $400 to $675 |
| More than 100 units | $45,000 to $150,000+ | $375 to $650 |
Source: carrier-quoted premiums across Pro Insurance Group's habitational business, as published in our habitational insurance cost guide. Ranges are for a full program: commercial property, general liability, loss of rents, equipment breakdown, and ordinance or law. They are a starting point, not a quote.
Two buildings we quoted. A 24-unit brick building in Algonquin, built in 1985, with a $4.2 million replacement cost: $22,400 a year, or $933 a unit, including a $5,000,000 umbrella and 18 months of loss of rents.
An 85-unit garden-style complex in Schaumburg, four buildings built in 2002, with a pool and a fitness room and a $28.5 million replacement cost: $58,200 a year, or $685 a unit, including a $10,000,000 umbrella and workers compensation.
Eight things move your own number.
| Cost factor | How it moves the premium | What to have ready |
|---|---|---|
| Units and replacement cost | The building limit is the largest part of the premium, and it is set by today's construction cost, not the purchase price. | Unit count, square footage, and a replacement cost estimate |
| Age and updates | Carriers price the roof, wiring, plumbing, and heating by when each was last replaced. | Year built and the year of each update |
| Construction | Frame, masonry, and sprinklered buildings are rated differently. | Construction type, stories, and sprinkler details |
| Location | Wind, hail, and crime exposure differ by address, and so does the fire protection class. | The address of each building |
| Occupancy | Student, subsidized, senior, and market-rate housing are underwritten differently. Vacancy matters too. | Tenant profile and current occupancy |
| Amenities | A pool, a playground, or a fitness room adds liability exposure. | A list of amenities and how each is secured |
| Claims history | Prior water and liability claims move the price and the deductible a carrier will offer. | Loss runs for the last five years |
| Deductibles and limits | A higher deductible lowers the premium. A lender's limits set the floor. | Your loan's insurance requirements |
What we need for an apartment building quote
Multifamily underwriters ask for the same items on every building. Having them ready gets your quote back sooner, and a complete submission is easier to place.
- The address of each building
- Year built, construction type, number of stories, and square footage
- Number of units, and the unit mix
- The year the roof, wiring, plumbing, and heating were last updated
- Sprinklers, smoke and carbon monoxide alarms, and any security features
- Occupancy: market-rate, student, subsidized, or senior, and current vacancy
- Amenities: pool, playground, fitness room, laundry, parking structure
- Annual rental income, or a current rent roll
- A replacement cost estimate, if you have one
- Loss runs for the last five years
- Your current declarations pages
- Your lender's insurance requirements
- Who manages the property, and any employees on your payroll
What Our Clients Say
Why Apartment Owners Choose Pro Insurance Group
An Agency, Not a Carrier
We are an independent agency. We work for the owner and shop the multifamily market on your behalf.
Lender Ready
We read the loan's insurance requirements and build the program and the evidence of insurance to meet them.
Portfolio Programs
For larger portfolios with strong loss records, we can access group captive programs with better long-term pricing.
Claims Help
When a loss happens, we work the claim alongside you so property, liability, and loss of rents are applied correctly.
New to the term? Start with what habitational insurance is. Own a condominium building instead of rentals? See condo association insurance.
Apartment Building Insurance FAQ
What does apartment building insurance cover?
It covers the building and common areas, general liability for tenant and visitor injuries, and loss of rents while units cannot be lived in after a covered loss. Most programs add equipment breakdown, ordinance or law, and an umbrella. It does not cover a tenant's own belongings. That is what renters insurance is for.
How much does apartment building insurance cost?
In our own quoting of Illinois apartment buildings, a 5 to 10 unit building runs $4,500 to $9,500 a year, an 11 to 25 unit building $7,500 to $18,000, and a 26 to 50 unit building $14,000 to $35,000, for the full program. Complexes over 100 units run $45,000 to $150,000 or more.
How much is apartment building insurance per unit?
In our own quoting, the full program runs about $500 to $1,100 per unit per year for a 5 to 10 unit building and $375 to $650 per unit for a complex over 100 units. Cost per unit falls as the building gets larger. Age, construction, amenities, and claims history move a building within its range.
What insurance does a lender require on an apartment building?
It depends on the lender. Fannie Mae's Multifamily Guide asks for special perils property coverage at replacement cost, with no coinsurance penalty, rental income coverage for 12 months, and general liability of at least $1,000,000 per occurrence and $2,000,000 aggregate, plus an umbrella of $1,000,000 or more based on unit count.
Does apartment building insurance cover loss of rent?
Yes, when the program includes it. Loss of rents, also called rental value or business income coverage, replaces the rent you lose while units cannot be lived in after a covered loss. Check how many months it runs. Fannie Mae asks for 12 months, and a major fire can take longer than that to rebuild.
What is the difference between apartment building insurance and landlord insurance?
Landlord policies are generally written for rental properties with one to four units. A building with five or more units is usually written on a commercial habitational program, with commercial property, general liability, and loss of rents sized for multiple tenants. A homeowners policy covers neither.
Are assault and battery claims covered?
It depends on the policy. Many apartment liability policies exclude assault and battery or cap it at a small sublimit, and it is a claim tenants and guests do bring. Ask whether your policy has that exclusion, and what it would cost to remove it or raise the limit.
What is coinsurance on an apartment policy?
A coinsurance clause requires the building to be insured for a set percentage of its value, often 80 to 100 percent. If the limit is below that at the time of a loss, a partial claim can be paid short. An agreed value provision removes the penalty, which is why lenders ask for it.
Is Pro Insurance Group an insurance company?
No. Pro Insurance Group is an independent insurance agency, not an insurance carrier. We work for the property owner, take the building to the carriers that write multifamily, and place the program with the company that fits. We are based in Elgin and Huntley, Illinois, and write business in 40+ states.
Get Your Apartment Building Quote
A few quick questions and nothing to upload. A licensed producer takes your building to the carriers that write multifamily and replies within one business day.
Get My Apartment Quote Call 833-776-4671
Reviewed by Neal Fusco, VP Commercial Lines
25 years in insurance, including 16 at Zurich North America in workers' compensation managed care and claims.
Illinois licensed insurance producer #18515626. Figures verified October 2026.