Requiring proof of renters insurance is standard procedure when a new resident signs a lease. Regardless of their proof of insurance at the time of move-in, many residents either cancel or choose to let it lapse, figuring they can live without it and cut an additional cost, or simply forget to renew their policy.
Although apartment operators generally require residents to have a certain threshold of renters insurance in order to live in a community, residents’ coverage is often not monitored beyond move-in. It’s time consuming for onsite teams to manage and not always feasible for them to track renters insurance daily. While many residents do purchase renters insurance and stay in compliance, some do forget to renew and there are occasionally some bad actors who provide proof of insurance only to cancel it once they have submitted the appropriate documentation and moved in.
According to a study conducted by the Insurance Information Institute in 2016, 59% of residents live without renters insurance. Our internal data also shows that compliance is much lower than what operators think. Having renters insurance greatly protects residents against unforeseen circumstances like theft, fire, natural disasters and vandalism – just to name a few. Some policies will even cover an individual in the event they are displaced due to a covered loss, as well as protect residents if a guest in their home is injured and medical attention is required.
Renters insurance extends beyond individual residents. Residents may think that by letting their policy go they are only affecting the insurance of their own belongings and it has no bearing on anybody else. In actuality, it can negatively impact everybody in a community. Operators who fail to do their due diligence in making sure residents have proper renters insurance put themselves at tremendous risk for liability should a disaster or unseen situation occur. That comes with a hefty price tag for owners and could mean higher rents for residents having to compensate for the increased costs accrued when damage occurs.
There has long been a missing link between the insured, providers and operators. Operators have started tapping technology solutions not only to streamline the process of purchasing renters insurance, but also to confirm the legitimacy of an insurance policy and continue tracking compliance without inundating onsite teams with insurance tasks.
The multifamily space is always evolving in some capacity, and that evolution has accelerated with more tech solutions for any task or scenario. Leasing is usually at the forefront of innovation, but now that operators have time to take a step back and assess which aspects can benefit from supplemental technology, more and more operators are identifying insurance compliance tracking as an area that could greatly benefit. Onsite teams already have full plates; asking them to monitor every resident's renters insurance isn’t feasible, but operators need strong risk mitigation.
Insurance technology services for the multifamily industry are making buying, selling and tracking insurance as simple and seamless as possible. Modern renters can search various policies and make a customized purchase within minutes while operators can easily monitor residents' policies to certify they’re in compliance. InsurTech is alleviating many of the onsite pain points with insurance tracking and creating a more robust risk mitigation strategy for operators.
Opting for an intermediate service that can facilitate the sale of insurance policies and track them for compliance not only removes the headache of finding and maintaining insurance from residents, but it also provides operators the peace of mind knowing that their investment is protected and their bottomline won’t suffer.