According to a NMHC Apartment Cost of Risk Survey, 84% of property management firms have mandated renters insurance. Unfortunately, mandatory renters insurance doesn’t guarantee that residents will keep their policies active while living at your apartment community. In fact, 30% of third-party renters insurance policies are cancelled within lease term and an average community has no proof of insurance for 19% of its occupied units.
While you can’t completely stop this practice, you can partner with a renters insurance company that specializes in multifamily policies who can provide you with a complete system to make sure your residents not only buy insurance, but keep it current as well.
Whether you are mandating, looking to mandate or simply want your residents to get insurance to protect your property and theirs, you need to be sure that the renters insurance provider you choose isn’t just providing marketing materials. They should provide you with a complete system to make sure your residents not only buy insurance but keep it as well.
Here are four considerations when selecting a renters insurance partner that can help you maintain compliance while protecting your assets:
1. Is the Renters Insurance Program Tailored for Residents?
The first thing you need to evaluate is the insurance program itself. Why bother with compliance best practices if your selected insurance partner can’t offer the most value for the least amount of money? The insurance partner you select can’t actually be about you. They need to be about your residents, which will ultimately benefit you. If your residents don’t see the value and benefits to them, then you won’t get the buy. So be sure to look for:
- A website that’s easy to navigate and makes sense
- A dedicated bi-lingual call center
- Ability to buy on a mobile device (Around 24% of renters purchase through mobile devices, which include phones and tablets.)
- A minimum coverage amount you’re comfortable with
- Premiums low enough that residents won’t cancel the insurance after they move in in order to save money
2. Proactive Compliance through Your Property Management System
Once you’re satisfied that the policies offered and the prices for the varying coverage will appeal to your residents, it’s time to see what they offer you to keep everyone in compliance, staff and residents included.
Integration with your current property management system (PMS) is a great step; some might say it’s the most important step. Before a prospect can become a resident they will need to provide insurance information and it would need to be placed into the PMS so there won’t be any “Oh, I will turn it in later” renters who never do. If your property management system can be used to circumvent your polices, then why have an insurance program?
3. Active Insurance Policy Tracking to Ensure Compliance
Your insurance partner should be able to help track policies you know about and notify the residents who are out of compliance with your property’s policies. This should include all the policies your residents have, not just the ones that are bought from your insurance partner. This is generally called certificate tracking and your insurance partner should be able to notify you and the resident when things are out of compliance or the policy is about to expire. So be sure that your partner can:
- Send various emails on your behalf informing residents that:
- They need insurance before they move in,
- They are in violation of their lease terms if they cancel their insurance policy, and
- They need to renew their policy when it expires.
- Verify third party insurance certificates by including the “Interested Party:”
- It is the only way to know if a policy cancels midterm.
- Owner is named as interested party on all non-partner policies.
- Your partner receives notification of lapses.
- This allows you or your partner to notify resident of non-compliance.
- Non-compliance is reported via a tracking platform.
- Supply you with reports on the number of policies that are active at your property
4. Educational Resources for Residents
Once you have selected your renters insurance program, you need the means and directions to answer your residents’ insurance questions. The best way to educate your residents about the realities of renters insurance is to make sure your on-site staff understands the value of the program and how to overcome the major objections they’re likely to encounter.
The insurance provider should supply you with marketing materials that fully explains the renter’s insurance program, answers potential resident questions, and provides contact information for further follow up. Finally, the insurance partner should have some type of training to help bring your staff, new and old, up to speed with the program.
When your staff approaches the subject of renters insurance with your residents and prospects, be sure they are well informed for the conversation and that your insurance partner keeps them and you that way. After all, we carry car insurance not because we’re the bad driver; it’s just in case someone else isn’t as careful as we are. The same holds true for an apartment. Your residents can monitor themselves but they can’t monitor everyone else.
Jason White is a Marketing Communications Strategist for RealPage. He focuses on the Asset Optimization solutions for RealPage, Inc., a provider of on-demand software solutions that integrate and streamline single-family and a wide variety of multifamily rental property management business functions. Reprinted with permission of www.PropertyMangementInsiders.com