We have found that offering Accidental Rental Damage Insurance (ARDI) is one of the newest trends in the “by owner” community, and could be something many landlords should consider instead of the traditional security deposit. See our chart below on whether landlords charge a security deposit or not.
We started asking in our surveys in 2012 whether property owners were replacing cash security deposits with the accidental rental damage insurance. This type of insurance is typically a flat fee of approximately $70. The tenant pays this fee, and coverage is offered for up to $3,000 in accidental damage, as long as it is properly reported.
This type of insurance can answer the questions of how to protect your property from potential loss and at the same time entice a company or tenant to rent your property. Corporate travelers can stay in hotel housing without having to pay deposit type of fees. It’s essential to understand what the industry standards are and how to protect yourself without losing a great potential renter.
According to the Corporate Housing Providers Association (CHPA) Industry Survey, some full-service, corporate housing companies do not charge security deposits. If they do, the average fee is $721.
| Do you charge a refundable security deposit? | |||||
|
2013 Responses |
2012 Responses |
2011 Responses |
2010 Responses |
2009 Responses |
|
| No Kind of Deposit |
7.6% |
10.6% |
10% |
16% |
8% |
| No Deposit – Accidental Rental Damage Insurance / ARDI |
8.4% |
7.9% |
n/a |
n/a |
n/a |
| $100 – $499 |
12.1% |
14.6% |
22% |
22% |
35% |
| $500 – $1000 |
35.7% |
35.0% |
26% |
24% |
19% |
| 1 Month Rent |
31.7% |
29.2% |
31% |
34% |
6%* |
| More than 1 Month Rent |
4.5% |
2.7% |
11% |
5% |
3% |
*In 2009, a response option for $1000 – $3000 was also offered; it had a 28% response.
The general trend among full-service, corporate housing companies is to require Letters of Responsibility (LORs) from preferred clients, as well as security deposit waiver programs or damage insurance in place of an actual deposit. With this in mind, we added a question about travel and damage insurance to the survey starting in 2011. We believe offering this type of insurance is a growing trend, and we will continue to monitor it.
The number of respondents who answered, “No, they don’t offer travel or damage insurance,” decreased substantially from 2011 to 2012, but held fairly steady from 2012 to 2013 at 69%. We believe this number will decrease in years to come, as more property owners offer some type of insurance.
| Do you offer Travel or ARDI / Damage Insurance? | |||
|
2013 Responses |
2012 Responses |
2011 Responses |
|
| Yes Both |
5.0% |
3.8% |
2.6% |
| Yes only Travel Insurance |
1.1% |
5.9% |
2.6% |
| Yes only ARDI / Damage Insurance |
10.1% |
8.1% |
1.6% |
| No |
69.2% |
66.3% |
81.1% |
| No – Don’t Know How |
14.6% |
15.9% |
12.2% |
0 Comments