"Loss runs" come up in almost every multifamily deal, but many first-time buyers have never seen one. Here are the questions we hear most often, answered in plain English.
Q: What exactly is a loss run report?
A loss run is a claims history report produced by an insurance company for a specific policy. It lists every claim filed during the reporting period: the date of the loss, the type of loss, the amount paid, any money reserved for claims still being settled, and whether each claim is open or closed. Think of it as the property's insurance transcript.
Q: Why do apartment building buyers need loss runs before closing?
When you buy a multifamily property, insurers use its claims history to decide whether to write coverage and how to price it. Clean loss runs give your agent room to negotiate and give more carriers a reason to compete for the account. A history of frequent water damage or liability claims tells a different story, and you want to know that story before you own the building, not after.
Q: What happens if I can't get the seller's loss runs?
Without them, underwriters treat the property as an unknown. You may be quoted as a new venture, with fewer carriers willing to look at the risk, and you lose the benefit of any favorable claims history the seller built up. After closing, getting prior loss runs is much harder: the seller's insurers generally will not release them to you because you were never their policyholder. The seller's cooperation is the only realistic path, so make loss runs a written condition of the deal.
Q: How far back should loss runs go?
Five years is the standard request in the industry. If the property changed carriers during that window, you will need runs from each insurer, because each company only reports on its own policy period.
Q: When should I ask for them?
Early in due diligence, and again shortly before closing. Insurers often want a loss run dated within roughly 90 days of your new policy's start date, and carriers can take two to four weeks to produce a report. Waiting until the week of closing can delay binding coverage, which can delay the closing itself if your lender requires proof of insurance first.
Q: What should I look for when I read a loss run?
Look at frequency and patterns, not just the total dollars. Repeated water damage claims can point to plumbing or roof problems. Slip-and-fall liability claims can signal maintenance or security issues. One large fire or hurricane claim reads differently than a steady drip of small ones. And check the details: errors in amounts, dates, or open-versus-closed status are common enough that owners should review their own loss runs and ask the carrier to correct mistakes before the report goes to underwriters.
Q: What about South Florida specifically?
Expect underwriters to read wind and water claims closely. A history of hurricane damage is not automatically a problem if repairs were done properly and the building was updated, but you will want documentation of that work. Non-weather water losses, like pipe failures in older garden-style buildings, get attention too. If the property has had repeated losses, your agent can tell you which carriers still write that profile and what terms to expect.
Q: I'm an owner, not a buyer. Do loss runs matter to me?
Yes, at every renewal. Request your loss runs a month or two before your policy renews, check them for accuracy, and give your agent time to market the account if you want alternatives. A clean, accurate five-year loss run is one of the strongest negotiating tools an owner has.
Have questions about loss runs on a property you are buying or a building you already own? Call GWS Insurance at (516) 476-6742 or reach us through our contact page at gwsinsurance.com/contact. We work with multifamily buyers and owners across South Florida.
This article is for general informational purposes only and is not insurance, legal, or financial advice. Coverage terms, availability, and underwriting requirements vary by carrier and property. Consult a licensed insurance professional about your specific situation.