Apartment Building Insurance: What 5+ Unit Buildings Actually Cost to Insure

Insuring a residential building with 5 or more units typically costs $425 to $1,200+ per unit per year, with real variation by building size, location, and risk zone.

How much does it cost to insure a 5+ unit apartment building?

• 5-10 unit building: $4,500 to $9,500 a year ($500-$1,100/unit)
• 26-50 unit building: $14,000 to $35,000 a year ($425-$750/unit)
• Low-risk markets: historically $150-$300/unit, those rates are largely gone
• Moderate-risk areas: $300-$500/unit
• High-risk coastal or catastrophe-prone zones: can exceed $650/unit, with some metros like Houston now topping $1,200/unit

The national average is trending toward roughly $800/unit, with many owners now budgeting $275 to $356 more per unit than in prior years.

Why has habitational insurance gotten so much harder to place?

This is one of the hardest-hit commercial insurance segments right now. 30-40% of new habitational placements now go to surplus/E&S lines instead of standard admitted carriers, nearly triple the share from a decade ago. Major admitted carriers have genuinely retrenched from this space. Watch for vacancy clauses too: most kick in at 60 (sometimes 30) consecutive days with under 31% occupancy, cutting fire and wind payouts by up to 15% and fully excluding vandalism, sprinkler leakage, water damage, theft, and glass breakage during that vacancy window.

What's the single biggest claim driver in multifamily property?

Water damage, not fire. 70.2% of multifamily operators cite water damage as their top insurance issue, outranking fire, wind, and general liability claims combined, with average water and freeze claim severity running $13,954 to $25,000.

What do real common-area liability claims actually look like?

Common-area claims dominate the liability side: slip-and-falls on snow or ice, broken stairs or handrails, negligent security, carbon monoxide, lead paint, and elevator injuries. Real settlements illustrate the range: $975,000 for a wrongful death in Michigan caused by a defective window blind cord; $545,000 for a stairway handrail failure that killed a 65-year-old resident; $500,000 for a lead-poisoned child.

Negligent security is its own major exposure class. A Georgia apartment complex paid a $31 million settlement after a 3-year-old was shot on the property. A Jacksonville apartment complex settled for $16 million after multiple victims were shot. An Orange County, Florida property paid $8 million after being found to have "a notorious history of crime, including a previous murder," a real factor courts weigh in these cases.

What should I actually carry at this scale?

Beyond standard property and general liability, loss-of-rents coverage and an umbrella layer are close to essential at 5+ units, the liability exposure across common areas and multiple units routinely exceeds what a base policy limit covers, and the real settlement figures above make that clear.

See full coverage details for Landlord (5+ Unit Buildings), or start a free quote to compare your own numbers.