Mistake 1: Underinsuring Property Values

Many owners insure to loan value or appraisal, not true replacement cost. After a loss, this triggers coinsurance penalties or leaves you short to rebuild.
Solution: Request a professional replacement cost estimate and review building valuations annually.
Scenario: After a fire damages 30% of a $12M apartment complex insured at only $8M, the carrier applies a coinsurance penalty. The owner receives far less than needed to rebuild.

Mistake 2: Ignoring Wind/Hail Deductibles

Texas policies often use % deductibles (e.g., 2% of insured value). On a $10M building, that’s $200,000 out of pocket.
Solution: Know your deductible amounts in dollars. Ask about buy-down options to reduce wind/hail exposure.
Scenario: A hailstorm destroys the canopy at a gas station. The owner assumed they had a $10,000 deductible, but the policy applied a 2% wind/hail deductible — a $50,000 surprise.

Mistake 3: Skipping Loss of Rents Coverage

If a fire or storm makes units untenantable, tenants stop paying rent. Many owners underestimate this or exclude it entirely.
Solution: Match limits to 12–18 months of realistic rental income and review annually with your agent.
Scenario: After a storm, 40 units in a multifamily building are down for 9 months. Without loss of rents coverage, the owner misses nearly $500,000 in income — but the mortgage still comes due.

Mistake 4: Overlooking Ordinance or Law Coverage

Older buildings often require costly code upgrades after a loss. Without this coverage, expenses fall directly on the owner.
Solution: Add Ordinance or Law coverage to property policies, especially for assets 15+ years old.
Scenario: A shopping center with 1980s wiring suffers fire damage. The city requires full electrical upgrades during rebuild. The owner pays six figures out of pocket because Ordinance coverage wasn’t included.

Mistake 5: Mixing Unrelated Properties Under One Policy

Insuring apartments, shopping centers, and warehouses together might look cheaper, but it creates problems at claim time and with lenders.
Solution: Group properties strategically — same use, similar construction — and keep lender-financed assets on their own schedule.
Scenario: A mixed policy covering apartments and a warehouse has a major claim. The insurer delays settlement while arguing over loss allocation across different property types — stalling the owner’s recovery.

Mistake 6: Focusing Only on Price

Lowest quotes often mean stripped-down coverage with exclusions for wind, theft, or liability.
Solution: Compare terms, exclusions, and endorsements, not just premiums. Ask your agent to explain differences in plain language.
Scenario: A retail center owner chose the cheapest premium. When a theft occurred, the claim was denied because the policy excluded theft entirely — a detail never explained.

Mistake 7: Not Starting Renewal Early

Last-minute submissions lead to rushed underwriting and higher premiums.
Solution: Begin renewal prep 90–120 days out with updated rent rolls, maintenance logs, and photos.
Scenario: An office building owner submitted late, with missing roof inspection reports. Underwriters passed, leaving only one carrier option — at 20% higher pricing.

Key Takeaways

• Review replacement cost values annually.

• Know your deductible strategy (AOP vs wind/hail).

• Loss of rents is essential for income protection.

• Ordinance or Law prevents code-related out-of-pocket costs.

• Don’t chase price — chase protection.

• Early prep = better terms and stronger negotiations.

Final Word

Insurance mistakes cost more than premiums — they cost time, compliance, and peace of mind. At Primesure, we help Texas property owners avoid traps and build programs that respond when it matters most.