As the multifamily rental market evolves, navigating risk protection strategies shouldn’t be overlooked.
While we’ve enjoyed strong revenue streams over the past several years, current trends point towards a more nuanced landscape. Flattening rent growth, rising vacancy rates, and strategic concessions are quickly becoming the new reality in many markets.
Clinging to business income (BI) coverage levels established during a rising market is likely not the most prudent approach. Should you have properties with lower projected net collections for 2024 relative to prior years, paying for coverage exceeding your business plan, is unnecessary and expensive.
Consider these steps:
1. Evaluate your current business income coverage limits. Are they aligned with your projected income?
2. Seek guidance from your insurance agent. They can help you navigate coverage options and determine the appropriate BI limit to align coverage limits to your business plan.
3. If a change in limit is necessary, your agent can work with your loan servicer to make the adjustment (reduction) for your upcoming renewal to avoid any potential issues with loan compliance.
Strategic adjustments to your BI coverage can optimize your risk protection and potentially lower your insurance premium. The insurance marketplace is hard enough without paying for coverage you may not need.
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