Apartment Landlords Taking Steps to Calm Insurance Rate Frenzy

Apartment operators continue to grapple with rising insurance costs, particularly in the Southeast, but some are taking more proactive steps to gain control of their situations.

Speaking at the National Multifamily Housing Council’s Apartment Strategies Conference this week in San Diego, Beth Anne Coleman, Chief Compliance Officer and Risk Manager, Fairfield, said her company has been spending a lot more time with insurance carriers, developing relationships with them by visiting them in Atlanta, Bermuda, and London, in relation to the 30 US markets where it operates.

“We are learning how we can improve the data they need for their underwriters,” Coleman said. “One thing is to do a better job of documentation, such as what we’ve repaired, if we’ve upgraded our systems, or replaced our roofs.

“We’re getting smarter about what the key drivers are and we’re keeping our brokers honest about it. We even presented for insurance rate relief from the panel of insurers in Florida.”

After six years in a row of a “really hard” economic insurance market, Coleman said she’s “seeing some signs of relief. The markets are stabilizing but that doesn’t mean lower rates, it means they are not accelerating at the same pace as recently.”

The insurance companies’ losses haven’t been as severe lately because they limited the capacity where they will offer coverage and they have raised their rates.

Karen Key, Division President, Southeast, Asset Living, said rates in the Southeast have been tough. Her firm is spreading the risk by partnering with other operators within a preferred policy.

“We’ve had deals come our way, but only if they are able to get insurance,” Key said.

Lacy Rice, Founding Managing Partner, FCP, said he’s had success in saving on his premiums by increasing his deductible.