As an investor, owner, or property manager in the real estate industry, you have probably experienced some headaches when it comes to insurance. The insurance industry looks at the habitational class of business as one that is highly volatile and subject to big swings in deductible and/or rate terms. What exactly is “habitational”? Insurance carriers view all the following similarly inside the “habitational” class of business: apartments, condo/homeowner associations, & dwelling rentals. Inside those areas, there are even more specialized categories.

The insurance market cycle swings from soft (i.e. low rates) to hard (i.e. higher rates) then back again as carrier claim experience improves/degrades. When carriers pay less claims and have a profitable year, they reduce their rates in an attempt to write more business and gain more market share. When carrier claim expenses go up, they must increase their rates to ensure that they remain profitable long term. When a market hardening cycle begins, the habitational class has historically been one of the first classes of business carriers harden on – through both deductible terms and rates. The reason for that is the class is highly sensitive to property losses, which can be mitigated effectively through deductible terms and rate adjustments.

Our agency has placed a heavy emphasis on the habitational class of business for more than 25 years, which has enabled us to develop carrier relationships to bring unique solutions to our customers for any of the following habitational classes:

• Market Rate Apartments
• Affordable Apartments – LIHTC (Section 42), HUD (Section 8/Vouchers), Public Housing, & USDA Rural Housing
• Assisted Living Facilities
• Condo Associations
• Homeowners Associations
• Rental Dwellings

Inside these specialty classes of business, we’ve developed many different tools to help property owners or property managers protect their assets, including:

• Business Income Tax Credit Coverage for Section 42 Projects – this can be an unexpected revenue loss for syndicators if not properly insuring the tax credits.
• Pollution Liability – One claim we’ve seen become common recently has been pollution claims for tenant health issues related to mold. In MOST circumstances, that will be excluded by a standard liability policy, and you can purchase a pollution policy for this exposure at a minimal cost per unit, per month.
• Wind/Hail Deductible Buydown Policies – Carriers are pushing higher and higher deductible terms inside the habitational class for ANY wind or hail loss. Our #1 goal is to explain the deductible structure clearly to insureds, as we can place wind/hail buydown policies to circumvent those large carrier deductibles.
• Specialty Coverage Forms for Directors & Officers, Umbrella, & Crime coverage, specifically for non-profit associations. Many P&C carriers offer D&O, Crime, & Umbrella coverage for condo/homeowner associations, very few of them construct policy forms that address all the issues that associations face. The “boilerplate” forms usually have big gaps in them that an association is better off avoiding!

When it comes to placing insurance on your apartment or association account, we have developed a process we think sets us apart from the marketplace. Our goal is to provide you with a competitive rate, but we also want our insureds to understand what they’re buying and give them options to construct a policy that works like they expect it to. We never want our customers to be surprised by a large wind/hail deductible or a policy gap that could have been avoided with a conversation before the policy was issued.

We work directly with owners, board members, or property managers to place the right products for their specific situation.