Many major commercial real estate loan servicers lack an in-house insurance team with the expertise needed for the mortgages they provide borrowers. As a bank or private lender underwriting CRE for investors, especially multifamily, the benefits of using an outside real estate vendor management company outweigh maintaining in-house insurance professionals.
Relying on outside vendors to complete commercial real estate transactions is a common industry practice with numerous benefits to the bank or lender underwriting loans. In this article, we will discuss the reasons that you would want to enlist experts in insurance for multifamily to review your borrower’s policy both during pre-close and for ongoing monitoring for annual insurance reviews.
When it comes to vendor management in real estate transactions, Armada Analytics’ insurance team is here to help you understand the intricacies and complexities of your borrowers’ policies.
Commercial Insurance Reviews
Our commercial insurance reviews give you the peace of mind in knowing that your borrower is adequately covered for losses that may occur during the life of their mortgage. In essence, Armada thoroughly vets borrower’s insurance policies based on the Lender’s insurance requirements to make sure that they have the right coverage for their property and location.
We can also provide annual insurance compliance services when your borrowers’ policies come up for renewal. But why should you go with a real estate vendor management company for insurance reviews? As we already mentioned, many lenders lack the in-house expertise to conduct a rigorous and robust analysis of insurance policies.
Commercial insurance reviews from expert outside vendors are necessary for multifamily CRE—Armada’s specialty—because being the property owner of a multifamily is not like managing or owning other commercial assets. People live in, work at, and visit your property. These types of properties contain hazards such as stairwells and hallways that impact the amount of general liability insurance your borrower will be required to carry. Property coverages are typically written on a blanket basis in which a blanket analysis may be required to analyze the spread of risk along with certain blanket policy provisions.
At the same time, different lenders have various standards. Given Armada’s work closing on Agency loans, we understand how to satisfy the more stringent insurance requirements of the public/private entities Fannie Mae, Freddie Mac, and HUD. We help you understand when a borrower has taken on too large a deductible for their property. We assist you with all aspects of insurance review for real estate assets.
The Top 3 Benefits of Using an Outside Vendor for Commercial Real Estate Insurance Review
Insurance is a must for commercial multifamily properties. The amount of General Liability, Property, Business Income, and Umbrella Liability you need depends entirely on the type of property you own, its location, as well as other considerations.
For instance, with loans underwritten by Fannie Mae and Freddie Mac, the amount of liability insurance borrowers must carry depends on the number of stories in their multifamily property or the aggregate number of units.
Outside commercial insurance professionals know how to examine ACORD forms to give you the best advice on your borrower’s insurance needs and liabilities.
#1. Your Insurance Reviewer Has the Insurance Expertise
Whether you’re dealing with property inspections or insurance, when you’re investing potentially millions of dollars in a borrower, you need to do more than trust that they have the right insurance coverage.
Analyzing the size of a borrower’s deductible, and the limits of insurance available for a single location or multiple locations, among much else, is best left to an expert who understands the nuances and complexities in navigating the insurance requirements for commercial transactions.
At Armada Analytics, our insurance team has collectively 166+ years of experience in multi-line commercial insurance underwriting, commercial loan servicing, and analyzing borrowers’ insurance policies on behalf of lenders for all types of risks and loans.
#2. You Save Money
The biggest reason to outsource any business activity, including the insurance review of commercial real estate assets, is simple: you save money in the long run. Think about the cost of employing an in-house staff to deal with the insurance reviews on all the real estate assets on your books.
Banks and other lenders stand to save a significant amount of money by outsourcing their insurance review to a third-party real estate vendor management company with the resources and understanding to expedite these transactions.
Why pay full salary and benefits for personnel that are easier to contract out?
#3. You Need a Thorough Product with Timely Service
This is a big one: when you need an insurance review as a condition of pre-closing or an annual insurance compliance review when policies renew, our team understands the importance of comprehensive insurance reviews and 100% compliance with lender and investor requirements. Armada can provide a detailed report or a customized report to meet your specific needs. We provide the rapid turnaround necessary in today’s fast-paced real estate market.
If any of these reasons apply to your company, you need to talk to our team of insurance professionals.
Armada is working on innovation and additional services that will keep Armada Analytics at the head of the pack in insurance review services.
