David Michael Miller
Danielle Sesko remembers talking to a landlord from the Fox Valley area.
The woman had a great, reliable tenant for five years. But then the man became temporarily disabled and lost his income, and could no longer pay his rent.
“She knew him, she knew he was reliable,” Sesko says. “As he was recovering, he wasn’t getting income. She was now struggling to pay her bills. While she felt entirely sympathetic and knew he meant the best, she was faced with the difficult situation of having to evict him. She had to remain solvent on her obligations.”
In 2015, some 2.6 million renters in the United States faced an eviction. About a quarter of all renters spend more than half their income on housing.
Although the crisis in evictions and affordable housing has become well known, it’s not just the people losing housing who suffer.
“When bad things happen to good people, good tenants, it puts both parties in a difficult situation — the tenant struggling to pay their rent and the landlord struggling to pay their bills,” says Sesko, director of innovation and product development at SafetyNet, a division of CUNA Mutual.
Her company is trying to find a way to help both renters and landlords cope with these situations. CUNA Mutual has been working on developing a series of products that address poverty and financial security issues for individuals. Its first such product, SafetyNet, is a personal insurance policy that protects people against job loss or disability.
Late last year, CUNA Mutual debuted another policy, Renter SafetyNet, geared toward preventing evictions.
The policy is taken out by a landlord on his or her tenants. If a tenant loses a job or becomes disabled, the policy will cover one to three months of rent.
Premiums vary greatly, depending on how many units a landlord has, how much the rent is, and how many months of coverage the landlord would like.
For instance, a landlord with five units that have an average monthly rent of $500 would pay $12.50 a month. That would cover a month’s rent for any tenant who loses income. Or, for $37.50 a month, that same landlord could cover three months for a tenant.
Those premiums jump to $18.50 and $55.50 for a landlord with five apartments that have an average rent of $1,000. Many landlords presumably pass that cost on to tenants with a slight bump in rent. Landlords can get a rate estimate at rentersafetynet.com.
“If a tenant were to lose a job or become disabled, anything that is a big shock to their personal finances, we pay their rent directly to the landlord,” Sesko says. “This helps keep the tenants in their home and helps protect the rental income for the average landlord.”
Sesko says there are misconceptions about who the “average” landlord is and how much money they have.
“The majority of rental units are not the large conglomerates we think about when we think of downtown Madison and Milwaukee,” she says. “The average size of a rental property is five units or less. These are not large businesses. These are average, everyday small business owners who are a lot of times relying on this rental income to pay their bills.”
The policy is currently available in Wisconsin and Iowa, although CUNA Mutual hopes to offer it in other states soon.
CUNA Mutual doesn’t release statistics about how many policies it’s sold. However, Sesko says there’s been strong interest in Madison, Milwaukee and the Fox Valley area.
Editor's note: This article originally gave the incorrect title for Danielle Sesko. She is the director of innovation and product development at SafetyNet, a division of CUNA Mutual, not the director of innovation and product development for CUNA Mutual.