Real Estate Coverage

By adding the AFM Real Estate Endorsement to the proVision 4100 policy, Real Estate owners will enjoy valuable coverage designed for their specific needs.

real estateReal Estate clients are faced with the challenge of maximizing investor returns while maintaining a stable base of satisfied tenants. A primary way to ensure the stability of this long-term investment is to effectively identify and manage the risks associated with operating a real estate portfolio.

If you have placed coverage for a Real Estate client, you know that there are unique risks and exposures that need to be considered and addressed via insurance. Real Estate owners may have a high concentration of values, are subject to local codes and regulation, and potentially can incur huge expenses when relocating tenants. By adding the AFM Real Estate Endorsement to the proVision 4100 policy, Real Estate owners will enjoy the following valuable coverage:

  • Down Zoning and Rezoning
  • Emergency Evacuation Expense
  • Tenant Relocation Expense
  • Contingent Property
  • Inn Keeper’s Liability

How coverage applies
To help you better understand how our unique Real Estate coverages will apply in the event of a loss, we’ve developed the following three brief examples.

Down Zoning and Rezoning: Provides coverage when the insured is prohibited from repairing, replacing or rebuilding to the same height, floor area, number of units, configuration, occupancy or operating capacity, as a direct result of enforcement of any law or ordinance.

Example: A 10-story building in California suffers a total loss. Since the original construction of the building, new zoning regulations state no new building can be higher than 8 stories in the area. Under this cover, AFM will pay for 8 stories of repair and replacement coverage. And, since the top 2 floors can’t be rebuilt, we will provide the insured with the amount that would have been spent to rebuild or replace the damaged property to the original building height, without having to use the capital expenditure provision of the valuation clause.

Emergency Evacuation Expense: This covers the cost to evacuate tenants from a building at the management’s discretion or when evacuation is ordered by civil authority.

Example: The Insured’s tenants are told that they need to leave the building per order of the management or by civil leaders because a large storm is heading their way.

The tenants incur personal costs to vacate the building, find additional accommodations for the duration of the evacuation and then the subsequent costs to move back. In order to help defer some of the extra costs that the tenants incurred evacuating the building and then returning to the location, the insured can submit a claim to help reimburse the tenants for extra expenses as a form of goodwill to help keep their relationship strong.

Tenant Relocation Expense: Real Estate companies often have tenants that either live at the property or run their businesses there. If the space becomes uninhabitable following a loss, the real estate company could incur tremendous costs to relocate tenants to new housing. The Real Estate Endorsement covers the relocation of tenants when rented space is made uninhabitable.

Example: An apartment building suffers a large fire. The whole building is made uninhabitable while clean-up and rebuilding occurs, the proVision policy will cover reasonable relocation expenses and the costs to pack and transport personal property of the tenants and store extra personal property as they await the restoration of the space.

As you can see, the proVision 4100 endorsed with the Real Estate Endorsement gives your clients the coverage they need so they can focus on keeping their space rented and maximizing the return on their investment. If you would like to learn more about how the proVision 4100 responds to the needs of your Real Estate clients, please see our Real Estate Endorsement Brochure or contact your production underwriter.

Note: This information does not constitute, replace or supplement policy language. The liability of AFM is limited to that contained in its insurance policies.