By Cyndy Breit
The multifamily insurance market has changed significantly over the past few years, and nowhere is that more evident than in California.
Carriers are pulling back from the asset class altogether, tightening capacity and scrutinizing portfolios more closely than ever before. For owners and operators, insurance has gone from a line-item renewal task to one of the most consequential parts of running a portfolio.
Western National Property Management, Western National Group’s full-service property management division, manages more than 23,000 apartment homes across 170-plus communities in California and Nevada. Given the size and geographic exposure of our portfolio, we’ve had to treat risk management as a core operating discipline not simply an annual exercise tied to renewal. That approach has become increasingly important as the insurance market has become more challenging. Here is what that actually looks like in practice.
Risk Management Belongs in the Room Before Decisions Are Made
Having a dedicated risk-management function means risk is part of the conversation before decisions are made, rather than after something goes wrong. Our team works closely with operations and our insurance partners to identify emerging risks, strengthen safety practices, manage claims and understand how operational decisions may ultimately affect our insurance program.
That coordination matters more now that the market has tightened. Carriers are looking much more closely at property conditions, loss history, preventative maintenance and an owner’s overall approach to risk. It isn’t enough to show up at renewal with a clean loss run; underwriters want a real accounting of how you manage risk year-round.
For an owner-operator without an in-house risk function, the first step isn’t necessarily building a department; it’s identifying someone within the organization to take ownership of it, someone working closely with operations and your broker, watching claims and incidents for trends and making sure issues are being addressed.
Preventative Maintenance Is a Risk-Management Program
Insurance underwriters want to understand what an organization is doing to prevent future losses, not just what has happened in the past.
This is one of the reasons we have always approached risk management as part of daily operations, not something we focus on only at renewal. Our preventative maintenance and capital expenditure programs are a big part of that. We conduct frequent property inspections and continually evaluate where investment is needed, and it starts with incident reporting: the sooner we know about an incident, the better we can understand what happened and determine whether there is something we can do differently.
Managing a large portfolio also gives us meaningful data. We can look across properties, identify trends and recognize potential issues before they become bigger problems. This is the core of risk management from an insurance perspective, and it is what matters most to underwriters.
Pre-Loss and Post-Loss Are Two Different Disciplines
It’s worth drawing a distinction that gets blurred in a lot of risk conversations: pre-loss and post-loss risk management are two different disciplines, and both matter.
Pre-loss is what we do before something happens: preventative maintenance, inspections, safety programs, training, capital improvements and identifying conditions that could result in a claim. The goal isn’t only to prevent losses; it’s to reduce their severity when something does happen.
Post-loss is what happens after an incident: how quickly we respond, whether we gather the right information and preserve evidence, and whether the right people get involved early. Those factors can materially change how a claim develops and resolves.
We also want to understand what happened and why. Sometimes that leads to additional training, a change in procedure, a maintenance initiative or a capital improvement. You are never going to prevent every claim, especially with a large portfolio. What you can do is learn from them and try to prevent the same thing from happening again.
Onsite Teams Are the First Line of Defense
Training is critical because onsite teams are usually the first ones responding when something happens. What they do in the first few minutes can affect how a situation develops.
We spend a lot of time training teams on incident reporting and, just as importantly, on when something needs to be escalated. If there is an injury, dog bite, water loss or other significant incident, we want the team to address the immediate issue, document what happened, preserve any evidence and get the information to risk management quickly.
While we can’t point to a single incident and say training alone prevented a claim, we have had many claims where early reporting and good documentation made a real difference: a photograph taken before conditions changed, video preserved before it was overwritten, a clear record of what happened while everyone’s memory was fresh. For those managing large portfolios, risk management can’t be everywhere; the ability to rely on onsite teams is essential, so giving them the training to recognize an issue and know when to involve senior management is one of the most important things owners and operators can cultivate.
The Most Common Mistake: Managing Risk in Silos
The biggest mistake we see other operators make is treating risk in silos. Insurance, claims, operations, maintenance, contracts, vendors and employee training all affect each other, and a decision that seems routine operationally can create an exposure that doesn’t become apparent until there is a claim.
Vendor management is a good example. It is not enough to have a certificate of insurance on file. You need to understand what work the vendor is performing, whether the insurance requirements are appropriate for that work and whether the contract properly addresses indemnification and risk transfer. Those details become very important when there is a loss.
The operators that manage risk well are the ones that involve the right people early. Risk management shouldn’t be the department you call after the decision has already been made or after something has gone wrong.
Getting Started Without a Dedicated Department
If you are managing a smaller portfolio, building this kind of resilience doesn’t require a full department. Start with someone paying attention to risk: an individual responsible for reviewing claims and incidents who understands where problems are concentrated. Put a real inspection and incident-reporting process in place so teams are regularly walking properties and reporting issues, then look at that information collectively. Are you seeing the same types of claims, at the same properties or under similar circumstances? That tells you where additional training, maintenance or capital dollars are needed most.
And lean on your broker and insurance partners. They have visibility into your loss history and what carriers are concerned about. Do not wait until renewal to have that conversation.
Where the Market Is Headed
Looking ahead 12 to 24 months, we expect a mixed insurance market. We are starting to see more capacity and better pricing on the property side, which is encouraging, but the underlying exposures haven’t changed. Wildfire, water damage, aging infrastructure and rising replacement costs remain real issues for multifamily owners, particularly in California.
We are more concerned about casualty. Claims are getting more expensive, and larger settlements and verdicts are affecting pricing, available limits and how much risk owners are being asked to retain. For us, that means continuing to invest in preventative maintenance and capital improvements, but also looking more broadly at safety, emergency preparedness, vendor relationships, contractual risk transfer and training.
We can’t predict what the insurance market will look like two years from now. But owners can make sure they are doing the right things today, so they are in the best position when they go to market again.
About the author:
Cyndy Breit is Senior Vice President at Western National Group, where she oversees Risk Management, Human Resources, and Investor Relations. She has more than two decades of risk management experience in the multifamily industry, with expertise in identifying, evaluating, and managing operational risk. Breit serves on Western National Group’s Executive Committee, Board of Directors, and Investment Committee.
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