10 Reasons to Carefully Consider How Insurance Carriers Use Crime Scores to Assess Risk in the Affordable Housing Industry

SAHF, Scott Insurance, Virginia Community Capital, and the Center for Real Estate Excellence at Virginia Tech published a report on how insurance carriers use crime scores to assess risk in the affordable housing industry. This report raises concerns around the accuracy and effectiveness of using crime scores in insurance underwriting for affordable housing properties. The report notes that a high property-level crime score “may preclude the owner of a multifamily housing complex from obtaining insurance coverage, and at best, a high crime score may result in higher premium costs.” The study also explains that these scores may not accurately depict the risk associated with insuring a specific property for a number of factors. This includes estimating property-level crime scores from larger census blocks, and failing take into consideration “heightened general liability risk associated with certain types of crime.”