Choosing the Right Insurance Partner
Consumers Demand Modern Insurance Products Similar to the Other Tech They Love
by Darren Nix
Being a rental property owner comes with several significant financial considerations, including having the appropriate insurance coverage for your investment.
Financial losses for property owners are not uncommon. According to the Insurance Information Institute, home insurance losses in 2017 amounted to $56.5B, with an average property claim of $15,532. For landlords with large multi-family buildings, these claims can be even greater.
What is landlord Insurance?
Landlord insurance is needed when the property owner does not physically live in the home. Similarly, you are only eligible for homeowners insurance if you use that property as your primary residence.
Due to the restrictions on what makes a home eligible for homeowners insurance versus landlord insurance, you are generally unable to have both policies simultaneously. Both types of insurance will provide liability coverage for the policyholder, and both will cover property damage.
The most basic level of landlord insurance is called a “DP1” or “Basic” and it protects against some catastrophic things like fires and explosions, but it excludes water damage, which is the most frequent cause of loss for landlords.
That’s why most landlords choose a higher level of coverage called “DP3” or “Special”, because it covers almost all causes of loss except earthquakes and floods.
Why Work With a Landlord Insurance Company
Once you’ve aligned on the right coverages for your needs, picking out an insurance company can mean the difference between claims being properly covered or being left high and dry. For many property owners, there are significant advantages to working with a specialized insurance company who has familiarity with the unique needs of rental property investors. It is important to work with a provider who can quickly educate you on available coverages for all circumstances and apply discounts and savings whenever possible.
Beyond specialized knowledge and expertise, there are additional time savings and convenience benefits to working with a modern landlord insurance company. Far from the days of visiting a local agent’s office, modern insurance companies offer quotes online in minutes—over the phone, email, or SMS—whichever you prefer. Customers can get personalized rates and coverage 24/7, including evenings and weekends, with coverage starting as early as the next day.
Instead of taking multiple days, companies like Steadily can help you get the process done in minutes, with coverage starting the very next day. This comes in especially handy when you need proof of insurance in order to close on your loan. Agents can secure coverage in all 50 states while offering localized knowledge specific to your portfolio of properties—be it a new purchase to fix and flip, a buy and hold, or a short-term rental.
What a Partner Program is Like for Property Managers
As a rental property investor, ensuring that your property is protected and kept at a high standard doesn’t end with getting the right insurance coverage.
Most insurance companies will recommend you also have a property management company to oversee your property or portfolio. Properties are often in better condition when maintained by a third-party manager, and landlords can receive insurance discounts simply for working with a property management company.
Vice-versa, it is highly preferable from a property manager’s perspective for investors to have adequate insurance coverage. A significant benefit for property managers is being added to the insurance policy as an additional insured, meaning that actions conducted by a property manager on behalf of the property are covered under the policy.
Traditionally, integrations between insurers and potential partners can be a lengthy and technical process or are performed manually offline. InsurTech providers like Steadily have enabled insurance and property management partnerships to work seamlessly by building digital insurance solutions directly into property management websites, portals and dashboards. The setup can be completed within half an hour or less and requires no complex APIs or development resources.
These low lift onboarding options integrate with a partner’s existing tech, including a drop-in website widget with custom branding options. By integrating directly onto property management sites, investors are able to manage aspects of the property’s finances, work with the property management company, and get insurance all without having to leave the property manager’s branded web environment. Through this integration, property managers can also set policy requirements such as minimum liability limits, receive updates on policy claims, and verify the policies meet the requirements expected of a rented property.
Understanding that many property managers need a one-stop solution for both renters and landlord insurance, companies like Steadily have built widgets to cover both sides of the equation. Once installed, the tool provides partners with data-driven reporting and analytics and real-time insights into their portfolio coverages. This means transparent reporting to ensure property managers are aware of all newly written policies, when coverage is lapsing, and if any action is required on their part. Referral compensation is also common between parties.
Lastly, many insurance companies maintain lists of preferred property management companies to refer to their insureds. This is a great opportunity for property managers to tap into a network of potential landlord clients who are in need of property management services.
Like many other industries, the global insurance market is experiencing a significant disruption in the traditional business model. Consumers are demanding modern insurance products that are similar to the other tech and tools they love. As the insurtech industry continues to evolve, new opportunities will emerge for adjacent categories to benefit from innovation in the space.
For property managers, partnering with an insurtech company provides additional value to clients, helps with risk mitigation, and leads to new revenue streams. By working together, insurtechs and property managers can better ensure their clients are protected and benefit mutually along the way.
