Do you think you might need Renters Insurance?
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Check out this article from Bristol West with a good explanation of your possibility to risk associated with renting a place. We can often provide bundles on renters policies to get multi-policy discounts, this equals extra savings for our clients. Enjoy!
What's the Deal with Renters Insurance? Adjusting to Changes in Consumer Lifestyles
It's undeniable: the fastest growing segment of personal lines property and casualty—in terms of policy count—is renters insurance⚹. More people are living in rental units and they are staying there longer. But the average premium for renters insurance continues to decline⚹⚹, so the booming growth in policies doesn't necessarily equate to big business.
What does this mean for insurers? Is this an important opportunity or a short-term trend to ignore? In search for answers, let's take a step back and look at the bigger picture.
Property Insurance Report⚹ recently discussed this change in consumer lifestyles and referenced the latest studies from the National Association of Insurance Commissioners. They found that from 2005 to 2014, the number of renters insurance policies doubled from 6.6 million to 13.2 million. That's an astonishing 10 percent growth each year. In comparison, there was just a 2.2 percent growth in the homeowners policy count (on the HO-3 form) from 2005 to 2014.
Renters insurance still brings in less money than homeowners because of its smaller premium volume⚹⚹⚹, but there's no escaping the fact that it's growing at a significant rate.
So, why is all of this happening? One likely suspect is the economic downturn that started in 2008. Indeed, this has shaken up the industry and influenced consumer habits and purchasing decisions. But I would be hesitant to blame the bursting housing bubble as the sole catalyst for change. The NAIC studies reveal that the fast growth in renters policies started well before the recession, and the growth has been consistent every year beyond the recovery stages.
Overall, these studies show that the increase in renters policies is not just a fluctuation in response to the country's economic situation. It is also the result of long-term lifestyle changes.
The takeaway? Focus on building customer relationships.
If you establish trust and credibility with renters now, these customers will be more likely to go to you for other products in the future.
Think about it. Renters insurance is a relatively low-value product, but it's a great entry point for a customer relationship that, with time, may grow into something bigger and better. If you establish trust and credibility with renters now, these customers will be more likely to go to you for other products in the future—like homeowners! If you aren't proactive, you'll find that when the time comes, potential homeowners customers will have already started a relationship with a different insurer.
Play the long game. Make the most of this opportunity to plant seeds that will grow your business!
⚹Source: Property Insurance Report. (2017, March 20). Continuing shift in consumer lifestyles accelerates growth in renters insurance policies.
⚹⚹Source: A report by the National Association of Insurance Commissioners: Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner's Insurance, 2005, 2013 and 2014 editions. The NAIC does not endorse any calculation or analysis based on its data.
⚹⚹⚹The NAIC report shows that the total premium on the renters HO-4 form is $2.5 billion; the total premium on the homeowners HO-3 form is $56.6 billion. Additionally, in terms of policy count, renters is 26 percent the size of homeowners, but in premium, it’s just 4.4 percent the size of homeowners.
Article By
Ryker Huizinga
Ryker is a multimedia storyteller with interests in writing, video, photography and design. He is on a quest to visit all of the U.S. national parks, and is almost always planning his next camping trip. Combining passions for travel and creative communication, he draws from his experiences to share stories of safety and adventure.
