Tenant Default Captive Insurance
Tenant default captive insurance replaces traditional security deposits with one landlord-controlled program covering tenant default, eviction cost and lost rent. Deposits rarely cover the real cost of default, and the occupancy benefit depends on scale and marketing. HUB sizes coverage to the real cost and confirms eligibility.
Where security deposits fall short of real cost
When deposit paperwork earns you nothing
Security deposits rarely cover the actual cost of turnover and damage, the paperwork to collect, hold and return or dispute them generates no revenue for the owner, and the occupancy benefit of eliminating deposits only materializes when the program reaches sufficient scale and is communicated correctly to residents. These three factors are connected: undersized deposits drive the damage costs that occupancy gains are meant to offset, and neither improves without the administrative shift that removes deposit handling entirely.
This captive only works at scale, a minimum of 500 units. Its biggest tenant-facing benefit, a lower move-in cost, only improves occupancy if prospective tenants understand it as an advantage. Standard enrollment was never built to include this marketing step. Both eligibility and marketing need attention.
HUB confirms portfolio eligibility against the 500-unit threshold before pursuing the program, and pairs enrollment with prospective-tenant marketing that frames the lower move-in cost as a genuine advantage over competing properties still requiring a full deposit.
The owners who see an occupancy lift from this program are the ones who marketed the lower move-in cost as a real advantage, not the ones who just quietly added it to the rent roll.
A qualifying portfolio gets access to the program's full economics, and the lower move-in cost shows up as improved occupancy because prospective tenants were told why it matters.
A typical security deposit comes nowhere close to covering what a landlord loses when a tenant defaults. Months of eviction with no rent, the eviction cost and a vacant unit add up fast. Standard deposit sizing was not built for this. Coverage needs to match actual cost.
HUB replaces the deposit entirely with a captive-owned policy sized to the real cost of a default, unit damage, eviction expenses and lost rent, funded by a small rent increase instead of an upfront sum that was never enough anyway.
The owners who come out ahead after a bad default are the ones whose coverage was sized to the real cost of eviction and vacancy, not to the size of a deposit set years ago.
A tenant default gets covered for what it costs, damage, eviction and lost rent, instead of whatever a security deposit happened to be, and the captive can pay the entire loss.
This captive only works at scale, a minimum of 500 units. Its biggest tenant-facing benefit, a lower move-in cost, only improves occupancy if prospective tenants understand it as an advantage. Standard enrollment was never built to include this marketing step. Both eligibility and marketing need attention.
HUB confirms portfolio eligibility against the 500-unit threshold before pursuing the program, and pairs enrollment with prospective-tenant marketing that frames the lower move-in cost as a genuine advantage over competing properties still requiring a full deposit.
The owners who see an occupancy lift from this program are the ones who marketed the lower move-in cost as a real advantage, not the ones who just quietly added it to the rent roll.
A qualifying portfolio gets access to the program's full economics, and the lower move-in cost shows up as improved occupancy because prospective tenants were told why it matters.
Tailored Risk Solutions for Your Industry
One coordinated program replacing deposits with coverage sized to reality
Generic deposit administration misses what this captive solves: a deposit that never covered the real cost of default, communication friction in the transition and an occupancy benefit tied to scale and marketing. HUB coordinates default-sized coverage, communication and eligibility into one program.
A typical security deposit comes nowhere close to covering what a landlord loses when a tenant defaults: months of eviction proceedings with no rent coming in, the eviction cost itself and a vacant unit during turnover. HUB's Tenant Default Captive replaces the deposit entirely with a captive-owned policy covering tenant-caused damage, loss of rents and the cost of eviction and legal expenses, with a per-tenant limit generally two to three times the monthly lease amount. The landlord is not limited to the size of a traditional deposit for recovery; the captive can pay the entire loss with available funds. This coverage is funded by a small rent increase, typically one to two percent depending on the portfolio's past loss history, rather than an upfront sum that was never enough anyway. Eviction cost insurance for landlords built this way responds immediately, without a dispute over deposit deductions.
Collecting, holding and eventually returning or disputing security deposits is ongoing administrative work that generates no revenue for the owner, and shifting residents to a rent-inclusive premium model instead requires clear communication so they understand and accept a small rent increase in place of the deposit they expected back. HUB notifies residents clearly, before move-in or at renewal, that a small rent increase replaces the deposit entirely, explaining plainly what the captive covers instead of leaving residents to piece it together from a rent statement. This proactive communication eliminates the deposit-return dispute process altogether, since there is no deposit left to argue over at move-out. Owners who explain this change clearly before it takes effect consistently report a smoother transition than those who let residents discover it as a surprise. Landlord-controlled captive insurance depends on this kind of proactive resident communication to succeed.
This multifamily occupancy insurance program is available only to portfolios of 500 units or more in the U.S. and Canada, a hard eligibility gate rather than a soft recommendation, and its biggest tenant-facing benefit, a lower move-in cost without a large deposit, only improves occupancy if prospective tenants understand and value it. HUB confirms portfolio eligibility against this threshold before pursuing enrollment, avoiding wasted evaluation time on a portfolio that does not yet qualify. That eligibility work is paired with tenant-facing marketing support, framing the lower move-in cost as a genuine competitive advantage over nearby properties still requiring a full deposit, rather than letting it register as just another line item. Landlords who market this benefit deliberately see it show up as improved occupancy, not just administrative simplification.
Industry Insights
Tenant default captive insights and research
