You’ve heard the horror stories: A resident decides to have a cookout on a rainy day and decides to use his bathtub as (what else?) a barbecue. Said resident fills the tub with charcoal, lights a match, and here comes the fire department.

Some stories are a little bit more bizarre: The three Gen Y renters who invent a new game called 'punch the other guy in the groin,' resulting in (you guessed it) a personal injury claim. For these reasons and a million others, property managers have long sought to encourage—and even mandate—renter’s insurance policies from their residents.

Indeed, Santa Barbara, Calif.-based multifamily software and services provider Yardi announced Aug 18 that the firm had acquired Dallas-based Multifamily Insurance Group (MIG) as an effort to provide ResidentShield renter's insurance products to its clients eager to get policies into resident hands. As part of the deal, MIG Principals Trip Stanford and Mike Composono have joined Yardi’s newly formed insurance division, which will strive to provide users with an integrated business offering that “includes the reduced insurance risk for property owners and peace of mind for renters,” according to Yardi Executive Vice President and Chief Operating Officer Gordon Morrell.

To help apartment operators better understand the challenges and opportunities inherent in renter's insurance and other multifamily related coverage, the Washington, D.C. based National Multi Housing Council (NMHC) is encouraging its members to participate it's 2011 Apartment Cost of Risk Survey, an annual benchmarking study that helps firms compare insurance costs to their peers. Data sought by the survey includes rates, deductibles, retentions, key coverage items, and claims history for several lines of insurance.

“The latest NMHC benchmarking shows that about two-thirds of apartment firms are now mandating renter’s insurance,” says David Carner, president of Carrollton, Tex.-based RealPage’s LeasingDesk Risk Mitigation Services. “So we’ve long passed the early adopter phase, and everybody in multifamily is getting on board.

According to Carner, operators are seeing little if any pushback from prospects on mandated renters insurance. For those who do encounter pushback or experience prospects that cancel a policy shortly after move in, tactics used in the mortgage and auto insurance sectors (including interested party and forced-place policies) can help fill the void. Interested party programs essentially alert a property manager when a policy is significantly altered or cancelled, enabling an operator to force-place a policy on the resident.

“We really don’t like the term ‘force-place’ in multifamily, but that‘s what it is called on the mortgage and auto side,” Carner says. “We call it renter protection, but the premise is the same: the second a homeowner drops coverage, the apartment company can automatically force-place a policy. I think that procedure could be commonplace within five years.” One hybrid-alternative to force-place already being implemented in the apartment sector is the purchase of a secondary policy or rider by the operator to cover renter negligence. Operators can then charge an administrative fee to the renter for implementing the policy, typically between $15 and $25 per renter.

The deadline to participate in the NMHC benchmarking survey is October 4. For more information contact NMHC's Lauren Dwyer at