Agents: Renters insurance is a growth opportunity

More people rent nowadays. And even though their homes are just as full of expensive computers, devices and entertainment systems, most renters don’t buy insurance. It leaves them with a big risk that could be easily covered. Discussing this risk and the appropriate solutions can go a long way toward capturing new clients.

Why insurance beats traditional warranties

Renters may not realize they can get breakdown protection for all of their electronics – anything that plugs in and turns on – through their insurance policies.

Insurance gives consumers a solution that can be easier, more efficient and less expensive than extended warranty plans or traditional service contracts. But many consumers may not even realize that they have the option to buy this coverage through their insurance.

Devices are a fundamental part of life nowadays. For example: 83% of Americans between the ages of 30 and 49 have a smartphone, according to Pew Research Center. 40% of adults have a game console. 78% have a computer.

These are devices that cost hundreds of dollars to replace or fix in the event of a breakdown – a big potential cost for anyone, whether they rent or own. Agents need to explain why it’s so important.

Covering those items through insurance offers a better, far more cost-effective option. Breakdown coverage can often be added for $50 a year – or even less.

Majority of renters don’t have any insurance

Of course, agents need to understand that renters have a different mindset about insurance, at least in comparison to homeowners. Nearly 95% of homeowners carry insurance on their homes, according to the Insurance Information Institute.

But only 40% of renters buy renters insurance.

This is of course in significant part due to the fact that mortgaged properties almost always require insurance, while rentals don’t. But it also speaks to mindset: Renters don’t have insurance at the top of their minds.

They should. And agents have an important role to serve in helping renters to understand why coverage can be so important. Even though renters don’t have a mortgage to protect, they do have lots of things they need to protect from breakdown.

Demographics mean more renters

Renters insurance is poised to be a growing opportunity because renters make up a larger pool of potential personal lines customers. Two key demographic shifts are driving the proportion of Americans who rent, rather than own their homes.

Approximately 10,000 baby boomers retire each day, and many of those plan to downsize by moving into smaller units, often rentals. Similarly, for a variety of reasons, millennials have been slow to buy homes, and many choose to remain renters.

The net result is that homeownership rates are at or near historic lows throughout the country.

The bottom line: There are a lot more renters out there. By discussing how purchasing renters insurance can be a valuable investment, agents may be putting themselves in a position to win new clients.

 

© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. This article is for informational purposes only. Under no circumstances shall HSB or any party involved in creating or delivering this article be liable for any loss or damage that results from the use of the information or images contained in or linked to in this article.

Jeremy Coffman

Jeremy Coffman, an insurance professional with over 14 years of multi-disciplined experience, is the vice president of personal lines marketing for Hartford Steam Boiler in Hartford, CT. Jeremy is responsible for all personal lines marketing strategies and initiatives.

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