Peace of Mind Security Deposit Waiver Program - Apartment

What is the Peace of Mind Security Deposit Waiver Program?

The Peace of Mind Security Deposit Waiver Program is a damage deposit program. For a nominal monthly premium, which is built into the resident’s rent, $3,000 worth of coverage is provided for accidental damages or stolen property of the unit owner. The property manager has input on the premium charged and whether they make the program mandatory or optional.

How does the Peace of Mind Security Deposit Waiver Program work?

The property manager typically collects the premium from the resident by adding it to the monthly rent. The monthly premium is based on a number of factors outlined in the questionnaire. Click here for the Security Deposit Waiver Questionnaire

The property manager keeps 75% of the monthly gross premiums collected to pay claims. Of this 75%, 60% must be placed into a separate, segregated claims (fiduciary) fund - the other 15% is kept up front by the property manager as an administrative fee. The balance (25%) is remitted to Virginia Surety Company. The fiduciary fund is kept to assure the property manager has set aside the required funds to pay for claims, at a limit of $3,000 per unit, and the funds are not spent elsewhere. Any money left over in this fund, after claims for that specified policy period have been paid, is the property manager’s to keep – 100%. Typical losses so far have averaged 15-20% of the total premiums collected. This program is backed by A rated Virginia Surety Company and is licensed in all 50 states.

What are the advantages to the property manager?

• $3,000 of protection against accidental damage or theft per unit guaranteed - The unit or its’ contents, if accidentally damaged or stolen due to a covered loss, will be repaired or replaced up to a maximum of $3,000 per policy period.

• Attract more residents - Residents can qualify for your unit without putting down a lump sum security deposit while at the same time the property still has $3,000 worth of damage and theft coverage per enrolled unit. This means you are able to compete more effectively against properties that do not offer the Security Deposit Waiver Program.

• Additional revenue source - Property manager keeps the monthly gross premiums in it’s own fiduciary fund and, after the policy period, is able to keep unused funds. This means an additional revenue source previously unavailable to you – improving your profitability.

• Eliminates the damage dispute - When a resident vacates the unit, there is no longer a reason to dispute damages since the money will not be coming out of their security deposit.

• Program can be tailored to the individual needs of the property manager - The program can be offered to residents on a mandatory or optional basis.

What are the advantages to the resident?

• Takes the guesswork out of the security deposit refund - For the resident, it is a true transfer of risk. If the resident accidentally damages the unit or its’ contents, they are protected. With a security deposit, the money comes directly out of the resident’s pocket. The Security Deposit Waiver Program eliminates the worry of when and how much of the security deposit the resident will receive back from the property manager.

• Less money needed initially to rent a unit - The resident does not have to come up with a one-time, lump sum damage deposit on top of the other initial payments necessary to obtain a unit. If the resident has a pet(s), they may no longer be required to provide a pet deposit. Pet damage can be included in the Security Deposit Waiver Program.

For more information please call Mike McNasby at 800-600-6617

 Click here for the Security Deposit Waiver Questionnaire

 Copyright © : MDM Group Associates, Inc. 2001