Renters insurance: Here are 5 key facts that all agents & brokers need to know
Over the past five years the percentage of renters in the U.S. has continued to grow, creating more opportunities for carriers and agents to sell renters insurance to these individuals.
According to an April 2013 report from the Census Bureau, the renter share of all households in the U.S. increased from 34.1% in 2009 to 35.4% in 2011. There were 10.7 million renters insurance policies issued in 2011, up by 53% from 7.0 million in 2006.
Given the opportunity for growth in this market, it is vital to understand the current trends shaping this part of the industry. Here’s what agents and brokers need to know to be successful.
1. Renters insurance is an increasingly competitive market.
More standard carriers are aggressively entering this market because renters insurance is a lower-frequency and lower-severity risk compared to most standard products. Overall, it is a fairly steady market and it’s a good profit generator for carriers. Additionally, these carriers can use a multi-product discount in conjunction with auto insurance or other products to encourage sales.
2. Policy mobility is needed.
Renters are becoming more transient, moving from place to place and expecting that their renter’s policy will keep up with them. Carriers need to design policies that can help meet this demand. Agents should make sure to review their client’s coverage for moving from place to place and the ability for renters to take their existing policy with them. If there are restrictions to where coverage is available (i.e.: from state to state or different types of dwellings), make sure to talk to clients about these points before it becomes an issue.
3. There’s an uptick in higher theft losses.
Thanks in part to the growing economy, many people are buying more high-end luxury items (e.g., big-screen TVs, iPads, etc.). Unsurprisingly, the industry is also seeing theft losses going up in addition to an uptick in severity in theft losses across the renters market.
4. More properties equals more need for coverage.
Large investment companies are buying significant volumes of houses that may have stayed vacant for a long period of time, and renting them out. As a result, there has been an increase in the renters markets. Also, with these larger properties being rented out, the industry is seeing some requirements for larger amounts of liability insurance and people wanting higher personal property limits.
5. Liability insurance requests are up.
Similarly, more property-management companies are requiring their renters to carry liability insurance and are also starting to track whether renters are (or are not) carrying this coverage. This additional coverage is designed to offset potentially large losses if the renter has a fire or does damage to the property.
The opportunity is ripe for carriers and agents alike to take part in the growing renters insurance market. In order to take advantage of these opportunities in 2015 and beyond, they must understand the unique risks, exposures and trends in this expanding market.
This article originally appeared on PropertyCasualty360.com
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