Freedom Specialty Launches Lease Protection for Property Owners, Managers

June 17, 2013

Freedom Specialty Insurance Co. has launched the Freedom Lease Protection Plan policy, which is designed to indemnify multifamily property owners and managers (POMs) against collection losses from tenant defaults. POMs can use the coverage as a means to eliminate traditional security deposit collection, administration and liability. This allows for an increase in tenant demand and occupancy, leading to the potential for POMs to have significant improvements in net operating income versus losses incurred in a security deposit program.

Freedom Specialty has partnered with Lease Data Solutions (LDS), an information services company serving the real estate, insurance and finance industries, to conduct data analysis services. LDS’s proprietary technology and algorithms evaluate POMs’ asset use, management practices and operations management. Policyholders will receive regular portfolio performance analysis and technical support from LDS.

The plan is designed to cover losses incurred by POMs when tenants default on their obligations under a qualified lease.

Covered losses include:

  • Rent and other charges for use and occupancy of a unit, garage and/or storage area
  • Actual expenses incurred to repair excess damage and cleaning of a unit
  • Legal fees and costs incurred in connection with a default or eviction

The policy extends the following benefits to POMs:

  • Provides coverage for collection losses caused by tenant defaults
  • Eliminates need for security deposits
  • Provides a significant competitive advantage over properties requiring deposits
  • Increases tenant demand
  • Increases occupancy and retention rates
  • Potential to significantly improve net operating income

Tenants benefits from the plan include:

  • No barrier to entry caused by security deposits
  • Qualified tenants can consider higher priced units
  • Simplified end-of-lease experience

Freedom Specialty Insurance Co. is a subsidiary of Scottsdale Insurance Co..

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