Peace of Mind Security Deposit Waiver Program  - Vacation

The Security Deposit Waiver Program has evolved over the past few years due to input from the people who implement the program - the property managers. Below are three versions of our program. With the introduction of the group self-administered program, MDM Group can now provide these programs to every size company.

Under the fully-administered program, a third party administrator (Cambridge Company) handles the claims for you. You collect the premium dollars from the guest. At the end of each month, you send in a premium report, a check for 60% of the month's gross premiums (you keep the other 40% as an administrative fee) and any claims to Cambridge. Receipts for repairs or replacement of the damaged items must be included with the monthly claims. Cambridge will then send you a check reimbursing you for the losses incurred.

The self-administered program allows you to administer and pay for losses through a fiduciary claims fund. You collect the premium dollars from the guest. At the end of each month, you send a premium report to MDM, along with 20% of the month’s gross premiums. You keep 40% up front as your administrative fee and put the other 40% into a fiduciary claims fund (can be a savings or checking account). You manage the claims and pay for the losses as they occur out of the fiduciary claims fund. The money that remains in the claims fund after the policy term has ended is yours to keep – 100%.

Letter of Credit (LOC) for the self-administered program

Virginia Surety Company requires a Letter of Credit (LOC) from each property manager. The purpose of the LOC is to guarantee that there is money available to pay for losses that are incurred under the Security Deposit Waiver Program. If for some reason the property manager does not fulfill their obligations to pay covered claims, Virginia Surety Company becomes obligated to do so. In the event that this occurs, Virginia Surety Company is then guaranteed reimbursement of the monies paid out for the claims through the LOC. We do not anticipate this situation occurring, however, Virginia Surety Company must take precautions to protect themselves. The monies in the LOC remain untouched by Virginia Surety Company as long as the property manager fulfills their obligations under the program.

Stop Loss Limit for the self-administered program

Stop Loss coverage is provided so that the property manager has protection against large losses. If losses exceed 65% of the gross premiums in a policy term, the stop loss coverage triggers and reimburses the property manager for covered, paid up to a maximum of $1,000,000.

This program is for companies that do not qualify for the self-administered program. Property managers join an association to become eligible for the group self-administered program. The association has annual dues of $125.00, which includes other benefits. You will then be eligible to administer and pay for losses through a fiduciary claims fund. The program then runs the same as the above self-administered program. The LOC also applies.

Click here for more information on the Security Deposit Waiver Program

Click here for the Security Deposit Waiver Questionnaire