Tennessee apartment owners · 5+ units
At five units, it stops being a house
A duplex or fourplex can often sit on a landlord policy. Once a building has five or more units, lenders, underwriters and the coverage itself usually move to commercial forms, and the terms that decide a claim change with them.
We place apartment building coverage anywhere in Tennessee, single buildings and small portfolios, shopped across multiple carriers.
Send us what you have nowOr call (615) 378-7187. Franklin office, serving all of Tennessee.
The line that decides the claim
Rebuild cost, not market value
The building limit should be what it costs to rebuild today, at today's labor and material prices. It has nothing to do with what you paid or what the building would sell for, and on an older Nashville brick building the two can be far apart.
Many commercial property forms carry a coinsurance clause. If the limit is set too low against the true value, the carrier can reduce what it pays on a partial loss, not just a total one. An outdated limit is the most expensive mistake on a commercial property policy, and it is invisible until the claim.
Check too whether the building is written at replacement cost or actual cash value. Actual cash value deducts depreciation, which on an older roof or older systems can be most of the claim.
Ordinance or law
After a serious loss, an older building usually has to be rebuilt to current code: wiring, sprinklers, accessibility, stairs. The standard property limit often won't pay for those upgrades, or for tearing down the undamaged part.
Ordinance or law coverage is what pays for it. On any building more than a few decades old it belongs on the declarations page, with a real limit.
What a five-plus unit policy should answer
Six things lenders and claims both test
Your lender's insurance requirements letter covers some of these. A claim tests all of them.
Lender requirements
Commercial lenders spell out the property basis, maximum deductible, loss of rents and how they are named on the policy. Send us the letter with your declarations and we will check the policy against it line by line.
Loss of rents
A fire in one unit can empty a building while repairs run. Loss of rents should cover the whole building's income for a realistic rebuild time, not a few months on one unit.
Premises liability
Stairs, parking, lighting, a tenant's guest on a wet floor. General liability limits that were fine for a single rental are often thin for a building with common areas.
Umbrella
One serious injury can exceed the liability limit. An umbrella over the building, and over the rest of your portfolio, is the cheapest layer of protection an owner can buy.
Wind, hail and water
Know the wind and hail deductible as a dollar figure, and whether water from backed-up drains is covered. Flood is a separate policy entirely; a standard property form excludes it.
More than one building
Several buildings can often be written on one policy with a schedule of locations and consistent terms. It means one renewal and one set of answers across the portfolio.
Questions
What Tennessee owners ask
Why is a 5+ unit building insured differently from a fourplex?
Lenders and underwriters generally treat five or more units as commercial property, and the policy usually moves to commercial forms with commercial terms: coinsurance, ordinance or law, loss of rents and premises liability. A one-to-four unit building can often stay on a dwelling or landlord form.
How much should the building be insured for?
What it would cost to rebuild today, not the purchase price or market value. If the limit is too low, a coinsurance clause can cut what the carrier pays even on a partial loss. A current replacement cost estimate is worth having before every renewal.
What does my lender require?
It varies, and it is in writing. Commercial lenders usually set the property basis, the maximum deductible, a loss of rents requirement and how they are named on the policy. Send us your lender's requirements and we will check the policy against them.
Do I need flood insurance on an apartment building?
A standard commercial property policy excludes flood. Whether you need it depends on the location, the lender and how much risk you are willing to carry. In Middle Tennessee it deserves a real answer rather than an assumption.
Should tenants carry renters insurance?
Yes, and the lease can require it. Your policy covers the building, not your tenants' belongings or their liability. Renters insurance also reduces the claims that would otherwise land on yours.
What do you need from me?
The current declarations page, the address, units, year built and construction, the roof age, occupancy, your lender's insurance requirements, and any loss history. A rent roll helps us set loss of rents correctly.
Also for Tennessee owners and investors: landlord and rental portfolio insurance, short-term rental insurance in Nashville, vacant building insurance, small business insurance in Franklin, and Sullivan James Tennessee.
Start here
Send us the building's policy
Upload the declarations page, and add your lender's insurance requirements if you have them. Buying a building? Send the address and the closing date.
A licensed Tennessee agent reads it and shops it across multiple carriers. No obligation to switch, and nothing changes on your current policy unless you ask.
Sullivan James Tennessee · 230 Franklin Rd, Building 2B, Franklin, TN 37064 · by appointment
(615) 378-7187 · tn@sullivanjames.com
General information, not legal or tax advice, and it creates no agent-client relationship. Whether and on what terms a carrier will offer coverage depends on its own underwriting, and policy wording varies by company. Coverage terms described are general commercial property practice. Sullivan James is an independent insurance agency licensed for property and casualty insurance, not an insurance company; for questions about how property is titled or held, talk to your attorney.