What Does the City Insurance Program Cover? Part 1

This is an excerpt from our free “Broker’s Guide to City Insurance Program” eBook. Click here to download your copy.

City Insurance or Landlord Insurance provides both Property and Liability insurance for multi-family buildings, apartments, condos, brownstones, and co-ops, addressing their unique exposures. Here is an overview of what our program offers.

Property Insurance

Our Property policy is written on an all-risk basis (unless a specific exposure is expressly excluded or limited). Valuation of the property is on a replacement cost basis with an agreed value. Replacement Cost coverage pays for the cost to rebuild the property as it was before if it’s destroyed. Replacement Cost coverage takes into consideration the current cost of materials and labor to rebuild the property in the event of a loss. These costs have increased since the structure was first built and were far less expensive than they are today as a result of inflation.

Included in our Property form are also several important coverage features for city homes.

Ordinance or Law

Ordinance or Law coverage is important for all types of properties and particularly for both larger and older buildings. A property owner may incur property damage to a portion of the building that requires replacing the undamaged portion of the building because it has been rendered unusable or condemned by city ordinance. There are also costs associated with demolition and cleanup.

Additionally, if the building is older and has been damaged by fire or another covered loss, it may not be up to code. There will be increased construction costs to update the property to comply with local ordinances or laws.

Our City programs include the following Ordinance or Law coverage

  • A – Full limit (covers the value of the undamaged portion of a damaged building)
  • B – 25% of building limit or minimum of $400,000 (demolition costs relating to the undamaged portion of the building or structure)
  • C – 25% of building limit or minimum of $400,000 (increased cost of construction due to updated codes)

Backup of Sewers and Drains Included

Over time, main sewer lines can deteriorate, crack, collapse, or become obstructed. The landlord or property owner owns and maintains the main sewer line, including any portion of the line that extends into the street or public right of way. Water backup and sewage backup coverage are not automatically included in all insurance policies. Our program includes coverage for losses related to this exposure up to the TIV limit.

Equipment Breakdown/Building Machinery, Heating/Cooling Systems, Miscellaneous Electrical Apparatus

Building equipment is subjected to risks that other types of property are not, such as power surges, electrical short circuits, and mechanical forces. If equipment fails, the costs to the property owner can be significant.

Assume the air conditioning system in a 75-unit apartment building is broken. There is the cost of replacing the system (or repairing it if possible), the possibility of additional expenses to limit the loss or expedite restoration, and the loss of business income.

Our policy includes coverage for equipment breakdown.

Minimum All Other Perils (AOP Deductible)

  • $1,000 with $2,500 water damage deductible; AOP deductible options up to $25,000

Terrorism (TRIA) Coverage Included

Provides coverage for damaged or destroyed property — including buildings, equipment, furnishings, and inventory. Losses are covered by a terrorism insurance policy only if the U.S. Department of the Treasury officially certifies an event as an act of terrorism.

Download our free eBook to continue reading about City Insurance Commercial Liability coverages.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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