“What makes you better than the rest?”
The answer to this critical question distinguishes property management companies among their more than 10,000 competitors operating within the US. With so many options, landlords need more than referrals and rates to vet management companies. They want a unique proposition that protects their investment and income. Property management companies utilizing high-quality insurance tracking and compliance programs deliver just that. They differentiate themselves by having a well-defined process for limiting risk exposure and preventing client losses. Here’s how that helps them win:
Better Cost Management
Managing insurance compliance isn’t easy. Many properties host multiple tenants operating under various lease agreements and terms. Further complicating things, according to an article in Insurance Journal, 70% of all renters’ policies cancel prior to renewal. Far too often companies discover lapsed coverage after a claim event, which leads to out-of-pocket costs and higher insurance premiums for landlords.
Thorough Certificate of Insurance (COI) tracking helps property managers control costs by ensuring tenants have active coverage. A “check it and forget it” approach results in reactive, error-prone insurance compliance. Well-managed COI programs regularly verify insurance coverage to prevent tenant claims and guard owner interests.
Effective compliance processes also help property managers validate that tenants hold the correct coverage. Lease agreements may specify that tenants hold a certain amount of liability protection, name the landlord and management company as additional insureds, or include additional interest notifications. By verifying coverage in advance, when a tenant is non-compliant, they can act immediately. Regular verification also easily gives property management companies answers as claims questions arise. What party is responsible for kitchen fire repairs? What about damage from a water leak? How about a slip on the stairs? A good compliance process arms property managers with the information necessary to evaluate tenant liability and better protect landlords against losses from inadequate tenant coverage before they occur.
Better Staff Training
Landlords benefit when property management companies take risk mitigation beyond their central office and infuse it throughout the organization. Everyone becomes a loss prevention specialist when staff are trained on insurance compliance. For example, under a good tracking process, property managers sourcing maintenance and repair subcontractors learn to validate necessary insurance coverages before hiring. The process itself creates a repository of qualified third-party service providers to expedite onboarding across the company. COI and compliance due diligence also helps property managers meet the “reasonable care clause” common in landlord agreements. The upfront investment in staff education affords the landlord and property management company added peace of mind should a subcontractor’s negligence ever cause an insurance claim.
Better Service Delivery
Property management is a busy job. Landlords may task management companies with marketing, financial planning, maintenance, lease negotiations, rent collection, tenant relations, purchasing, contract administration, and more. With so much to do, it’s understandable why many property management companies neglect insurance tracking, but that’s a costly mistake. These companies inevitably waste time addressing unnecessary claims and performing unscheduled maintenance – effort better spent filling vacancies and collecting tenant payments. Management firms that invest time up front creating COI tracking and compliance programs reap the rewards down the line with more resources available for revenue-generating services. They focus on landlord profits while other less savvy companies fight tenant and subcontractor problems.
Property management companies wanting to earn new business know how to answer, “What makes you better than the rest?” They recognize that preventing losses and managing risk through superior COI tracking and compliance makes them more than just hired help. They are important partners – a unique value proposition for any landlord.
Get Better with myCOI
Ready to make insurance compliance part of your next property management proposal? Learn how myCOI’s automated notifications, insurance expert reviews, and risk insights help you stay ahead of liabilities and stand out among the crowd.