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May 1, 2009
Industry studies show apartment occupancy decreases as unemployment rates increase, so in an attempt to retain renters nervous about their employment status, many property managers are now offering involuntary unemployment riders as part of renter's insurance.
For example, Riverstone Residential, which manages more than 30 apartment complexes in Washington County, offers Pink Slip Protection so residents who lose their jobs can remain in their apartments. At a cost of less than $10 a month, the plan covers a significant portion of a resident's rent for up to two months, said spokesman Michael Payton.
Brought about by the struggling economy, the new rental insurance product offered though partner Assurant Specialty Property offers a fresh approach to support residents during a very stressful time, Payton said.
"When somebody loses their job, the last thing they need to be focused on is where they're going to live tomorrow," he said.
It's good business for the property owner, too, Payton said. If a resident remains in his or her apartment, the property owner's revenue stream continues uninterrupted and the likelihood increases that the resident will renew his or her lease, saving expenses related to filling vacant units.
"As inexpensive as it is, it is probably a good investment for most of us," Payton said.
Mortgage unemployment insurance for homeowners has been around for years, paying all or part of a mortgage payment for up to six months if the borrower involuntarily loses a job.
Riverside hopes the program generates brand loyalty for the property because it represents the best interests of residents who are more apt to pass along a positive experience to other prospective renters.
Riverstone Residential is also working with a number of property owners who may want to augment the Pink Slip Protection program and cover the portions of the rents that exceeds what is covered under the involuntary unemployment coverage from Assurant Specialty Property.
According to the U.S. Bureau of Labor Statistics, 2.5 million people have lost their jobs during the past four months.
CAS Insurance Services, a CAS Partners company that provides the resident insurance program, will oversee the Pink Slip Protection program to Riverstone Residential clients, said Toni Portmann, CAS Chief Executive Officer.
"As a world-class property and asset management company, we understand the negative consequences felt by residents as a result of losing a job," Portmann said.
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