Glossary
Taxes & Insurance
Property Insurance
Coverage for physical damage to the building itself, from causes such as fire, storm, or vandalism, based on the property's replacement cost rather than its market value. Property insurance is the coverage category tenants most often legitimately share through CAM, since it protects the shared physical asset they occupy.
Firm impact
The audit question for property insurance is rarely whether it belongs in CAM. It's whether the covered-asset schedule matches the leased property, since a policy covering additional buildings, equipment, or a landlord's other holdings inflates the premium tenants are asked to share.
How this gets abused
A landlord owns two adjacent buildings and insures both under a single blanket property policy, then passes through the full combined premium to tenants in the building under audit. Tenants end up funding coverage for a building they have no lease interest in.
Practitioner note
Request the property insurance schedule of covered locations and confirm it lists only the building the client leases in. If the policy is a blanket policy covering multiple properties, request the premium allocation method used to split the cost among them.
FAQ
Questions about property insurance
Is property insurance usually a valid CAM charge?
Yes, in most leases property insurance on the shared building is an authorized pass-through. The issue to check is whether the covered property matches the leased building, not whether the coverage type itself belongs.
What is a blanket property insurance policy?
A blanket policy covers multiple buildings or locations under one combined premium. When a landlord owns several properties, request the schedule of covered locations to confirm the premium allocated to the audited property is proportional and not inflated by other holdings.
You know the term. Now check the math.
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