With near record-level unit deliveries, slowing rent growth and a tougher path to maximum net operating income, operators are running out of easy ways to protect their bottom line. And those pressures are pushing more operators to take a harder look at a long-overlooked gap — renters insurance compliance.
“We are seeing more management companies take a closer look at their renters insurance,” says Mary Ellis, vice president of renters solutions for Assurant, a premier global protection company which insures more than 3 million multifamily properties nationwide.
Only 55% of renters carry renters insurance, and, among those that don’t, 31% say it’s because they never thought about it or it wasn’t offered to them, according to research from Assurant.
The challenge, Ellis says, is that coverage requirements and tracking practices vary widely across portfolios. Some operators don’t mandate coverage and others, when they do, track manually or inconsistently. That can leave residents and property management companies exposed. Ellis shares why older processes are struggling to keep pace and the steps operators can take to close the gap.
Fragmented systems, high stakes
Historically, if insurance is required, compliance has involved a leasing agent asking a renter at move-in whether they have coverage and filing their proof of insurance away. But insurance can expire mid-lease, and with on-site staff juggling multiple responsibilities and fragmented operating systems, a lapse can go unnoticed for months, Ellis says.
The lack of compliance comes into focus after a fire, leak or other event. In multifamily properties, a single uninsured incident could spark costs across multiple fronts.
“You have damage that extends between the units, you have resident displacement costs, you have restoration,” Ellis says. “There's a lot of uninsured losses that can happen that can impact the management company.”
There can be a reputational cost as well. When repairs linger due to missing or unfamiliar insurance, other residents and prospective renters take notice. And over time, that can impact resident retention and customer satisfaction, she says.
Meaningful coverage, Ellis says, needs to address both personal effects protection for residents and liability coverage for the broader community. “It’s really important that there's coverage for both,” Ellis says.
Embed, automate, partner
For property managers looking to close the compliance gap, Ellis points to three practical shifts many operators are making.
- Start with the leasing workflow
Build coverage into the lease itself. Through Assurant’s Cover360 program, for example, coverage becomes a natural part of the move-in process, alongside signing up for utilities or registering a pet. Premiums can be bundled with monthly rent, Ellis says.
“When renter's insurance is automated through the leasing workflow and it's part of your lease addendum, participation is going to be significantly higher,” she says. For residents who already have a policy, modern systems let them upload documentation directly, keeping records centralized.
- Move from point-in-time verification to continuous monitoring
Assurant’s work with top property management companies has found that manual processes can mask the true compliance gap because operators are tracking coverage at a single moment in time instead of the full lease term.
The solution is continuous monitoring with automated compliance tracking and real-time policy verification, Ellis says. With these tools in place, operators gain visibility into coverage gaps by property, portfolio or region and the ability to target training and outreach before an incident occurs.
- Choose a purpose-built partner
When every resident brings a different insurance carrier and claims process to the table, a single incident can turn into a tangle of phone calls, emails and unanswered questions. Assurant’s preferred‑partner model, for example, eliminates that chaos with a single, well-understood path forward for operators and residents.
“It’s all a unified experience for them, and that helps significantly in the process,” Ellis says.
With renters insurance heavily regulated, varying by locality and state, selecting a purpose-built multifamily carrier with deep experience is important to ensuring compliance, consistency and long-term performance, Ellis says. Purpose-built carriers know how to navigate regulations, but also how best to provide daily support to address unique needs of a multifamily community and ensure claims are smoothly resolved.
“They have the experience to process the claims, to be the customer support, to train the on-site teams, and truly be that partner with experience in the industry,” she says.
Managing risk at scale
Operators who successfully navigate today’s market stressors will be the ones who start treating renters insurance as a critical piece of their risk management strategy, building it into the leasing process and monitoring it continuously while relying on a carrier who understands the industry.
“The goal is to reduce friction for the leasing teams and for the residents while lowering risk for the management company,” Ellis says. “As portfolios grow, having the right processes and partners in place becomes even more important.”