An Affordable Housing Landlord Group Launches a Captive Insurance Co to Reduce Cost

Ballooning insurance costs, particularly among multifamily properties with affordable housing units, have sharply risen in recent years. According to a report released in March by the New York Housing Conference, the “average cost to insure an affordable apartment was $1,770 in 2023, representing a 103% jump from four years ago, when the average premium was $869.” Efforts to reduce the expense prompted the recent launch of Milford Street Association Captive Insurance Company. Essentially a “form of self-insurance whereby the insurer is owned wholly by the insured,” the newly created captive insurance company is “owned by its premium payers, including Wavecrest and Workforce Housing Group.” Membership is limited to “residential rental buildings that have regulatory agreements limiting rents and that receive public financing.” While the concept gives the members better control of costs and availability, its reach is limited. Although landlord group, the Community Housing Improvement Program has called for a state-backed insurance provider, this year’s New York State budget did not include legislation to establish its own insurance vehicle but did include legislation barring insurance companies from denying coverage to affordable housing providers.

Source:    https://therealdeal.com/new-york/2024/07/10/landlords-launch-milford-street-association/