NeighborWorks Multifamily Initiative Exceeds $2 Billion in Insurance in Force

For Immediate Release

September 20, 2006
Contact: NeighborWorks America, Douglas Robinson
202-220-2360, drobinson@nw.org

NeighborWorks® Multifamily Initiative Exceeds $2 Billion in Insurance in Force

(Washington, D.C.) — NeighborWorks America announced today that the Neighborhood Risk Management Corporation, a NeighborWorks America affiliate, recently exceeded the $2 billion mark for insurance in force on apartment buildings owned or managed by members of the NeighborWorks Multifamily Initiative. NRMC is a program that provides access to traditional property and casualty insurance coverage, but at reduced cost, thus helping to improve the overall affordability of qualifying rental apartment units, and strengthen risk management systems to build loss controls of participating NeighborWorks organizations.

The NRMC now has helped 43 members of the NeighborWorks Multifamily Initiative obtain insurance on more than 25,000 units. Overall, there are more than 55,000 rental units within the Initiative that are owned or managed by eighty-eight organizations.

“The NRMC has proven to be a great benefit to our members,” said Frances Ferguson, director of the NeighborWorks Multifamily Initiative. “Since launching the insurance program in the beginning of 2005, it has been able to pass-through premium savings of up to fifty percent to Initiative members.”

One reason for the premium savings is the insurance pool in which the apartment buildings are placed. NRMC enables NeighborWorks properties to be pooled into a more representative risk group than before, thus receiving more accurate and affordable risk pricing.

NRMC is a fully insured program that establishes a loss fund to pay up to $500,000 in property losses and $750,000 of liability losses. NeighborWorks organizations contribute to the loss fund and purchase insurance for losses above those amounts. Any single loss is covered up to $500 million on the master property policy, and liability is covered up to $26 million for each occurrence. Each participating NeighborWorks organization and property owner is a named insured, receiving individual bills and meeting its respective premium obligations.

NeighborWorks organizations have a $5,000 deductible for property and pay a premium based on construction and location. On the liability side, NeighborWorks America is contributing $1 million over three years to help subsidize the liability insurance loss fund. Losses that exceed the loss fund are fully covered by insurance.

And although the insurance initiative is comprehensive, Ferguson noted that competition for insurance services is so intense that to stand out among the competition her team has to provide value-added insurance services such as management and loss mitigation training.

“The Multifamily Initiative is as much about sharing information and best practice tips on how to improve management and the overall property environment as it is about providing lower-cost coverage,” said Ferguson.

About NeighborWorks America
NeighborWorks America provides financial support, technical assistance and training for communities across the nation, including the NeighborWorks network – a nationwide network of more than 240 community development organizations working in more than 4,400 urban, suburban and rural communities across America. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years alone, NeighborWorks organizations have generated more than $10 billion in reinvestment and helped more than 780,000 families of modest means purchase or improve their homes or secure safe, decent rental or mutual housing.