Market Overview

LeaseLock Secures $1M to Launch First Rent Payment Insurance


Backed by American Family Insurance's venture arm, LeaseLock introduces new technology-powered insurance to $100 billion residential housing market.

Los Angeles, CA (PRWEB) December 16, 2016

One-third of all renters experience issues with their credit scores, meaning they will either have to get a cosigner or pay an exorbitantly high security deposit, otherwise they will be declined for their new apartment home.

LeaseLock, a disruptive new type of insurance for the rental housing market, solves this problem. LeaseLock eliminates archaic financial instruments used by property managers by introducing an insurance product powered by technology that better evaluates risk beyond just the credit score.

If an applicant is approved by LeaseLock's predictive risk algorithm, they can pay the LeaseLock fee, which is then translated into an insurance policy that protects the property for all rent payments. The renter is approved for their lease without any special requirements while also having their credit score improved. The property manager converts more leases while eliminating default losses. This generates better cash flows, making properties more valuable for property owners.

"If you were to start from scratch, an insurance model for credit risk is how you would do it," said Derek Merrill, LeaseLock COO and Co-founder.

"The structure and value proposition of the LeaseLock product are truly unique, and make this program the first of its kind in market," said Dan Reed, managing director, American Family Ventures. "Our investment in the company further demonstrates American Family's commitment to providing policyholders high-quality products that are both innovative and customer-focused."

Since launching earlier this year, LeaseLock has enrolled property managers representing over 500,000 units with properties launched across 14 states. Key customers include Avenue5 Residential, Lennar Multifamily Communities, and Cardinal Group. LeaseLock is helping its customers expand rapidly in key markets like California, Texas, and Washington state, but is also approved to offer its rent payment insurance in 49 other states.

American Family Ventures, the venture arm of American Family Insurance, led the $1 million seed round, and was joined by several financial technology investors. The LeaseLock program is backed by insurance rated A- (Excellent) by A.M. Best and a $4 billion multiline reinsurer.

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