Tracking resident compliance re:Renter's Insurance

My company has been requiring renter's insurance from residents since late 2007. Recently, however, we had an incident in which a resident who had provided a valid insurance certificate at move-in had allowed the policy to lapse. When it came time to collect, the insurance company said they weren't liable because the resident had stopped paying the monthly premiums, and of course the resident couldn't pay $50,000 for the damages incurred. This has brought up a few interesting issues:

1) How are your associates tracking continued compliance with the requirement to obtain and maintain renter's insurance after move-in?

2) How can you enforce compliance with the insurance requirement after move-in? I find it hard to envision a Justice of the Peace allowing us to evict a resident over their failure to maintain insurance without extensive (read expensive) legal proceedings.

3) Are you offering any kind of captive insurance product that satisfies the lease requirements? (I'm thinking about RLL or something similar here)

4) If you are offering a captive product, how do you avoid the accusation that you are "selling insurance", which of course requires a license?

I look forward to your comments!

Great questions. Let's try and address in order:

1. How are associates tracking? There are two ways of addressing. If you have companies that work with your property or management company they can provide CIO's (Certificate of Insurance). The resident should provide and depending on your PM Software you can track through this. A valid CIO should be required before the keys are given. As far as tracking this should be part of either your month end review for upcoming expirations if your software has it, reporting from insurance carriers your work with, or if neither a spreadsheet tracking. Having you listed as an "additional insured" should provide you with notification of changes in the policy or cancellation. There is always a chance of lapse from the time the policy is cancelled and you receiving notification.

2. How can you enforce? First, your lease or addendum has to have the language to provide this requirement including keeping in force during the term of the lease and any periods of "hold over." If you don't have the right language, you will have a hard time finding a magistrate or judge to enforce.

3. There are products and associations out there with companies that can do a lot of the work for you such as First Advantage Saferent and others offered as NAA Suppliers. There needs to be clear limits and requirements in your lease and addendum, which is the only way to provide for balanced program. Do not allow or make waivers in the established program, otherwise you set a precident that will jeopordize your program and legal basis.

4. YOu never are selling insurance unless you are licensed in that state. Any affiliation with the companies working with NAA will tell you how to present, and your staff should never state anything that would lead to the perception this is what you are doing. Here again, legal terms and training of your staff is critical.

Hope this helps

Erenterplan offers online tools that allow you to monitor this. They also sell policies. In the event that the resident chooses the Erenterplan and it gets cancelled, or expires, they alert you to the issue so you can open a dialogue with the resident. In the event that the resident chooses to use another provider; you need to have the resident tell their agent to list you as loss payee and send you a copy of the policy declaration. Make sure that the AGENT knows that you expect to be alerted if their policy expires or gets cancelled. Erenterplan has a tool where you can enter information about the policy from the other provider. They send you a monthly report that details who is not in compliance. I have a letter you can edit and use to communicate with residents for this purpose if you like. As a rule; I visit this issue around the 15th of the month, so that it does not interfere with end of month and beginning of month stuff.