Only 50% of renters realize there’s affordable insurance tailored to their needs

Only 50% of renters realize there’s affordable insurance tailored to their needs | Insurance Business America

Only 50% of renters realize there’s affordable insurance tailored to their needs

Renters’ insurance can be a useful tool for residents to protect themselves and their belongings, but among consumers, there are many misconceptions about this solution that brokers can help address. The Renters Insurance Consumer Insights Benchmark 2019 from Assurant revealed that only 50% of the respondents even purchased renters’ insurance, and among those who did, many were unaware of what this insurance covered.

For example, 97% didn’t know that they’d be covered if their dog bites someone, 81% were unaware that a rug ruined by an overflowing toilet is covered, 84% were unaware that a guest tripping and breaking a bone is covered, and 57% didn’t know renters’ insurance will cover temporary housing if a home is made uninhabitable by a fire in their neighbor’s apartment.

Read more: Poll shows vast protection gap among renters

Moreover, the renters that didn’t have insurance reported that they never had the coverage offered to them, or they assumed it would be too expensive. Almost one in five respondents believed that their landlord would take the blame if something went wrong in their unit, and probably unsurprisingly, 59% had underestimated replacement costs if an incident did occur.

“A lot of the times when they’re exposed to [renters’ insurance] is when they’re moving into an apartment, and then their landlord tells them that they’ve got to have coverage. At that point, they’re pretty excited just to move into their apartment, so they’re not really thinking about all the risks associated with moving in there and what could happen,” said Steve Hein (pictured), senior vice president of Multifamily Housing at Assurant.

Brokers can play a big part in helping renters learn about this insurance and its various coverages by discussing misconceptions on what it covers and what it doesn’t cover, as well as the affordability of the solution, which many are unaware of.

“Quite often, we hear from our customers after the process and we hear that they were surprised at how affordable the program was. I really think that a lot of the benchmarks they use is the cost of auto insurance and clearly, there’s a lot more risk in that,” explained Hein. “In finding out how affordable the coverage is, it’s certainly an ‘aha’ moment for those customers. With pretty much anything that we purchase, price is an important consideration, so being able to let them know that it’s affordable is definitely a good opportunity.”

This conversation can also lead to a discussion of risk mitigation tips. Renters tend to underestimate the worth of their belongings, so brokers can walk through each room with them to determine accurate values, or advise them to do this as soon as possible on their own.

“They don’t think about their pots and pans, and they don’t think about how many clothes they actually have,” said Hein. “The last thing they want is when they do have a claim, [to discover] they only can replace half or a third of their belongings. That’s a pretty disappointing experience.”

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Another risk mitigation tip is advising clients to not post photos when they’re on vacation, since that can entice thieves to visit their properties.

“It’s not that you can’t post your vacation pictures or talk about it – it’s just that you should wait till you get home to do that. You’re in essence advertising to anybody out there that you’re not home,” said Hein. “There’s also a lot of people relying on their neighbors to watch their apartment, and there’s only so much time they can spend devoted to looking over.”

Personal belongings are covered under a renters’ insurance policy, alongside temporary housing expenses and coverage for someone else getting injured on the property.

“Having an insurance policy can cover you for those types of things. It’s definitely not only a value-add, but certainly it’s an awareness that there’s a risk I have that I was unaware of,” Hein told Insurance Business.