How the CARES Act 30-Day Eviction Notice Is Driving Up Multifamily Insurance Costs

One of the most consequential (and least reported) connections in multifamily real estate is the direct line between the CARES Act's lingering 30-day eviction notice requirement and the insurance cost crisis that operators are experiencing today. The connection runs through claims data, crime scores, and underwriting models in ways that are not obvious unless you know where to look.

This post traces that connection from the legislative text to the insurance market consequences, and explains why fixing the CARES Act notice is, among other things, an insurance cost issue.

The CARES Act notice: what it is and why it persists

In March 2020, Congress enacted the CARES Act, which included a temporary 30-day notice requirement before landlords could file for eviction in federally-backed and federally-assisted housing: Section 8, LIHTC, HUD-assisted properties, and those with Fannie/Freddie-backed mortgages. The requirement was intended to be temporary, expiring with the eviction moratorium.

Due to ambiguous statutory language in 15 U.S. Code Section 9058(c), some courts continue to enforce the 30-day requirement today, nearly six years after it should have expired. Some judges within the same jurisdiction reach opposite conclusions on whether the requirement applies. The National Apartment Association estimates this issue impacts 40% of rental housing nationally, approximately 17 million units.

The average state eviction notice period is 6 days. The CARES Act requirement, where enforced, extends this to 30 days minimum. Adding 24 days of delay to the beginning of what is already a multi-month process in most jurisdictions.

The claims pathway: how delayed eviction affects insurance losses

The connection to insurance costs runs through a specific claims pathway that begins when a non-paying or disruptive resident cannot be efficiently removed from a property.

Extended occupancy of at-risk residents

When eviction proceedings are delayed (either by the 30-day notice requirement, court backlogs, or other factors) residents who are in financial distress, engaged in disruptive behavior, or creating property risk remain in their units longer than they would under state law alone. Each additional day of occupancy by an at-risk resident is an additional day of claims exposure: property damage accumulation, liability incident risk, and damage to neighboring units from neglect or behavior.

Crime score degradation

Insurance carriers use crime score methodologies (algorithms that assess property-level crime risk based on location data and incident reports) as a primary underwriting factor for multifamily GL and property coverage. Properties where eviction delays allow disruptive residents to remain longer accumulate more incident data that feeds into these algorithms.

The result: properties in markets with active CARES Act enforcement see crime score data that reflects the elevated incident frequency that eviction delays create. Higher crime scores trigger premium surcharges, coverage restrictions, or carrier exits - regardless of whether the underlying management quality of the property is the same as a property in a market without CARES Act enforcement.

The affordable housing amplification

The CARES Act notice impacts 40% of rental housing nationally, but the impact is not evenly distributed. The covered properties are disproportionately affordable housing (Section 8, LIHTC, HUD-assisted) which are already the properties facing the most severe insurance availability and cost challenges.

• $9M → $53M  unpaid rent debt growth at one affordable housing provider:  2019 to present, documented in NAA testimony

• $11M → $147M  unpaid rent debt at DC affordable housing communities: 2019 to May 2025

• 12–16 months  average eviction processing time in Washington D.C.:  with COVID-era requirements including 30-day notice

These numbers illustrate the financial fragility that extended eviction timelines create for affordable housing operators. And that financial fragility directly affects insurance: carriers evaluating an affordable housing property that carries $53 million in revolving unpaid rent debt, with court backlogs measured in years, are pricing for a risk profile that the underlying management quality does not reflect.

The broader insurance market impact

The cascading effect from CARES Act delay to insurance market outcomes follows a clear logic:

• Delayed evictions extend claims exposure duration per incident: more days of occupancy by at-risk residents means more property damage claims, more GL incidents, more inter-unit disputes

• Accumulating claims data drives crime score increases for covered properties: particularly in urban markets where CARES Act enforcement is most consistent

• Higher crime scores trigger carrier underwriting restrictions: premium surcharges, reduced limits, coverage exclusions, or full declinations

• Carrier exits from affordable housing markets reduce competition and drive remaining carriers to charge higher prices for the coverage they do write

• Investors become reluctant to finance or acquire CARES Act-covered properties: reducing capital availability and property values

The connection is structural, not incidental. Fixing the CARES Act notice language (which the Respect State Housing Laws Act (H.R. 1078/S. 470) would accomplish by striking the ambiguous statutory text) would remove a significant contributor to the insurance cost escalation that is making affordable housing economically unviable to operate.

What operators should know and do

For operators with CARES Act-covered properties in their portfolio, the insurance implications are immediate and actionable. Understanding your crime score methodology and how it is being applied to your properties, documenting the connection between eviction delays and claims exposure for underwriting conversations, and building reserve funds to absorb the coverage costs that result from crime score-driven surcharges are all near-term steps.

The longer-term solution is legislative (specifically the passage of H.R. 1078/S. 470) which is why operator participation in the NAA's advocacy process on this issue directly serves their insurance interests, not just their operational ones.