What could possibly go wrong? If you are the proud owner of a multifamily property, the answers range from minor falls to catastrophic weather events. How can you mitigate the risk and reduce your total number of claims? And what kind of multifamily insurance coverage do you need to manage the circumstances outside your control?

Bryan Shimeall is the Vice President of Multifamily Risk Advisors, a division of Tanner, Ballew and Maloof formed to leverage the firm’s 20-plus years of experience handling insurance for the multifamily industry. Bryan is dedicated to delivering customized solutions that mitigate risk for apartment building investors, and he is an expert in the realm of risk assessment and exposure to loss.

Today, Bryan sits down with me to share his definition of and approach to risk assessment. He discusses the most common gaps in multifamily coverage, the most common property and liability claims, and the best strategies for mitigating risk. Bryan also explains when to pursue a master policy and the fundamentals of catastrophic coverage. Listen in for insight on the benefits of working with a risk management consultant and learn what to look for in a multifamily insurance policy!

Key Takeaways

The role of Multifamily Risk Advisors

  • Insurance services for multifamily industry
  • Boutique shop in business 20 years

Bryan’s definition of risk assessment

  • Process of identifying inherent risk of property
  • Includes property and liability

Bryan’s approach to risk assessment

  • Age and condition of property
  • Construction type and location
  • Look at seller’s historic losses

The most common gaps in coverage

  • Catastrophic hurricane deductibles
  • Denial that managing risk will mitigate claim

How operators can manage risk

  • Routinely walk property
  • Keep up with deferred maintenance
  • Update AC units

The most common claims

  • Liability—wet conditions, loose handrails cause falls
  • Property—small oven fires

The disadvantages of the ‘trailing 12 premium’

  • No reason to look at number for guidance
  • Don’t know how owner has insured property

The benefits of working with a risk management consultant

  • Knowledge, experience and relationships
  • Specialize in multifamily, understand mechanics

How Multifamily Risk Advisors can assist during the acquisition phase

  • Ask for OM on property (square footage, construction type)
  • Respond quickly with real insurance costs for property
  • Identify other issues (i.e.: budget money for roof replacement)

When to pursue a master policy

  • No raw number (≈1K units)
  • Geography is most important factor
  • Uniform deductible, renewal date
  • Allows for predictability

The fundamentals of catastrophic coverage

  • Windstorm deductible in coastal areas
  • Hailstorms in Midwest reflected in rates

The most common mistake among investors

  • Pay attention to premium but not deductibles

Connect with Bryan

Multifamily Risk Advisors

Email bshimeall@multifamilyra.com

Resources

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

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