AppFolio Insurance Services

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Accidents and damage happen – it’s just a fact when managing rental properties. When these accidents happen, if your renter doesn’t carry insurance it can be expensive and a hassle for everyone. To avoid these costly situations it is becoming increasingly common for property managers to require residents to carry insurance. This recorded webinar is for customers using AppFolio's web-based property management software.

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AppFolio Insurance Services

  1. 1. Protect Your Propertieswith Resident Insurance Whitney Kopf Director, Insurance Services
  2. 2. Agenda1. Demystify resident insurance2. Current trends in industry3. Provide best practices4. Show new AppFolio features5. Talk about new service designed to protect your properties from resident caused damage
  3. 3. Let’s talk insurance!
  4. 4. What is renters insurance? Combined “package” of property & liability protection for renters’. (personal policy, renter is the named insured) 1. Property 2. Liability 3. Adtl. Living ExpensesProtects personal belongings from Protects personal liability Covers added costs associatedtheft or damage (on/off premises) (including others’ property, e.g. owner) with loss of use (e.g. temp housing) Average Cost $200/yr
  5. 5. Why is insurance important?
  6. 6. Why is insurance important?Two year-old flushes toy down the toilet Tenant leaves pan of oil on stove and& causes overflow requiring carpet causes kitchen fire. $35K repairdrying. $550 service
  7. 7. If resident has insurance… File a claim directly to cover cost of repairing damages. Resident Insurance = Renter’s Insurance or Liability Only Insurance
  8. 8. Poll Question How many of your residents have insurance?
  9. 9. The Problem Only one third of apartment hunters reported having renters insurance.
  10. 10. When resident doesn’t have insurance Try to Collect Owner Pays Building Insurance Policy
  11. 11. Comparing Coverage Renter’s Tenant Building Insurance Liability Insurance Replace resident’s belongings if stolen or damaged ($1,000) ✔ Repair water damage caused by resident leaving bathtub running ($1,000) ✔ ✔ Repair kitchen damage due to resident cooking accident ($25,000) ✔ ✔ ✔ Repair damage to roof caused by windstorm ($7,500) ✔ Wildfire burns down house ($150,000) ✔
  12. 12. Requiring Insurance 66% 44% 24% 2008 2009 2010Apartment Firms Requiring Tenant Insurance Annual NMHC ACOR Survey
  13. 13. Poll Question Do you require residents carry insurance?
  14. 14. Can I require insurance?We see wide adoption of requiring resident insurance nationally.• Resident must have choice of provider• Require certain amount of liability coverage on leased property• Special regulations for affordable housing and rent control• Consult with your legal counsel
  15. 15. Why are we seeing this trend? • Transfer risk away from owners • Gain ability to recover repair cost for damages • Increase owner’s profitability • Reduce expense of resident caused damage (79 percent*) • Reduce property insurance rates (MFR) • Competitive advantage for fee managers* “Renter’s Insurance: National Study on Owner/Manager Utilization & Perceptions” SatisFacts Research LLC
  16. 16. Best Practices1. Be consistent across portfolio2. Require specific liability limit (not a provider)3. Keep things reasonable4. Communicate to residents early and clearly5. Talk about the benefits of renters insurance6. Obtain proof of coverage prior to move-in
  17. 17. New AppFolio Features
  18. 18. Why we built these features
  19. 19. What we heard… Tracking and enforcing is hard!
  20. 20. Easy to track
  21. 21. Easy to track
  22. 22. Tenant Provided PoliciesCheck each policy:All residents are listedLimits meet your minimum lease requirementYour company is listed Additional insured or interested partyDon’t forget…Obtain proof of coverage before providing keysTrack details in AppFolio (provider, policy number & expiration)Audit monthly using tenant directory
  23. 23. Included Insurance with Services AppFolio (optional)Tracking Tenant Insurance DetailsReporting Tenant InsuranceBuilt in Tenant Liability Insurance Programwith One-Click Tenant Enrolment
  24. 24. AppFolio Insurance ServicesMaking it easy to manage a successful required insurance program. • Eliminate time wasted on enforcement • Cover your tenants with basic liability protection who have not met requirement • Peace of mind knowing your units are covered
  25. 25. Fully Integrated
  26. 26. Tenant Legal LiabilityPolicy Details•Commercial Policy (you are the named insured)•Protects Landlord’s Property Only•$100K limit per occurrence with $100 deductible(covered losses incl. fire, smoke, explosion, water damage, falling object, vehicle)•Underwritten by Great American Insurance Company;Beecher Carlson Insurance Services is broker/agent•Price $9.50/unit/mo
  27. 27. Tools for success• Sample lease addendum• Communicating to your tenants • Sample letters • Info sheet for welcome package • Notice of Insurance on portal• Flexible accounting options • Can automatically charge tenant
  28. 28. What customers are saying“ Keeping track of all our tenant policies and enforcing our insurance requirement used to be a big headache, but with everything managed right in the AppFolio “ software its just so easy to mandate renters insurance. We now have the confidence that every unit in our portfolio is protected.
  29. 29. Summary Insured residents Ability to effectivelyreduces overall risk and track compliance is theultimately improves the key to a successful bottom line. program. Driving a trend to You have all the right require resident tools to ensure your insurance. portfolio is protected. To learn more about AppFolio features or services email support@appfolio.com or visit http://info.appfolio.com/insurance.html

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