The insurance market for multifamily properties has had a tough go recently. Rates have increased for 20 consecutive quarters. Notable fluctuations are driven by multifamily housing in disaster-prone regions. Florida (prone to hurricanes) presents an effective case study. For example, while Arizona and Florida have similar property counts, their median insurance costs per unit diverged significantly, varying from an average of $197 per unit per year in Arizona to $1,069 in Florida.

In addition, according to a survey commissioned by the National Leased Housing Association, for 2022-23 renewals, nearly one-third of housing providers experienced premium increases of 25% or more.

With regional premium variances and diminishing levels of coverage marking the insurance landscape, it's clear operators need to focus on sophisticated risk management strategies to obtain more favorable terms.

The impact of a property's claims history on insurance rates cannot be overstated. Owners and operators have significant control over this aspect by enhancing maintenance and risk management. Simple steps you can take to mitigate the impact of rising insurance costs:

• Implementing consistent risk management inspections across all properties. This should track incidents onsite, document all pertinent information, capture photos and signatures. This gives visibility to risk professionals in a timely fashion to help address claims quickly.
• Keeping meticulous records of all compliance and maintenance activities. This helps confirm that maintenance items are on track. It can also help provide important evidence in the event of a claim.
• Training staff to integrate risk management into their daily responsibilities. Cultivating a culture of safety within the organization can lead to lower incidents and claims.
• Creating consistency across properties by adopting a technology platform to streamline these processes and improve documentation and compliance.

LEVERAGING TECHNOLOGY FOR PREVENTATIVE MAINTENANCE

Operators are increasingly relying on technology to manage inspections, tasks, and documentation effectively. Documenting maintenance steps inside the platform not only confirms tasks are being done on time, but also provides important evidence in the event of a claim. These systems not only enhance operational efficiency, but also provide valuable data that can be used during insurance negotiations to demonstrate a proactive approach to risk management.