Why Proptechs Should Offer Renters Insurance
Written by The Trōv Team August 11, 2021
Over the last several years, more and more industries are turning to technology to improve, streamline, and create convenience for all parties involved, not just consumers. We have seen this in Retail, Finance, Insurance, and most recently in Property & Rental Management. Proptechs, property management, and modern rental communities are prime to offer embedded insurance products. But what products make the most sense for a typical proptech and their users? What type of insurance does that user need? What fits with the users’ rapidly changing lifestyles?
Renters Insurance is an ideal starting point for proptechs and property management companies and their modern users.
- According to research and a poll conducted by the Insurance Information Institute, Renters in the United States occupy approximately 43 million housing units, and renters insurance is growing in popularity every year. In 2020, 57% of renters had renters insurance, up from 42% in 2018.
- 18.2% of Millennials say they plan to rent forever, as discovered in Apartment List's 2021 Millennial Homeownership Report.
- The number of cost-burdened renters, i.e., those paying more than 30% of their income on housing, remains near record highs.
- 20.4 million renters are cost-burdened, with more than half—some 10.5 million—of these households are severely burdened, paying more than 50% of their incomes for housing, according to a study conducted by the Joint Center For Housing Studies Of Harvard University.
Combining this with record low rental stock availability, the need for the safety net that insurance provides has never been greater.
- When you consider that only 39% of Americans could pay for a $1,000 unexpected expense, today's renters carry an exceptionally high level of risk. This lack of a safety net is even more striking at lower income levels and for young people. Only 1 in 3 Millennials have enough savings to cover a $1000 unexpected expense. For those with an annual income of less than $30,000, only 21% could absorb a $1000 unexpected expense, as found in Bankrate’s January 2021 Financial Security Index.
Renters without renters insurance will sometimes say that they feel they don’t need it, don’t have much worth protecting, or it's too expensive, but these common myths are worth unpacking.
- “I don’t have much stuff!” According to a 2013 US News article, the average renter in a two-bedroom apartment has around $30,000 worth of contents. Replacing everything in the event of a fire, for example, is a cost most renters cannot afford to risk.
- “My landlord has insurance” They might, but it typically will only cover the building itself, not the renter nor the renter’s belongings, leaving the liability on the already cost-burdened renter.
- “I can afford to replace a few things.” Contents insurance is only one part of a renters insurance policy. Another essential coverage is liability coverage. For example, if a dog bite occurs (as happens to 4.5 million Americans every year, as stated by the American Veterinary Medicine Association ), without renters insurance, the medical expenses for the victim fall purely on the renters. The average dog bite claim was over $50,000 in 2020, as noted by the Insurance Information Institute. Renters insurance with liability coverage would cover this expense, removing a considerable burden from the renter.
Given the increasing financial pressures on today’s renters and the relatively low cost of a renters insurance policy, with average premiums around $15/month, the Insurance Information Institute found that renters insurance is a no-brainer to offer the modern renter. Furthermore, today’s modern renter is used to being online; they know and trust their banks, payments, vacation, and budgeting apps better than any old-school insurance agent - and expect insurance to be delivered right where they are. Consumer-facing proptechs are innovating and gaining trust, and like all other digital companies, are perfectly positioned to serve their customer’s adjacent insurance needs. Embedded insurance allows modern proptechs and property management companies to offer their users products that are highly beneficial to their financial well-being while generating recurring revenue and increasing customer loyalty and value.
How embedded insurance works at Trov:
Trōv enables companies to easily embed Renters Insurance into an existing brand or product experience. Trov provides two implementation approaches: Embedded via API or end-to-end White-label. For companies looking for a plug & play solution to rapidly get to market, Trov’s custom branded white-label solution gives partners everything they need to distribute insurance without worrying about many of the insurance and technical hurdles. This includes policy onboarding, management, claims, and reporting. For a more integrated and customizable experience, partners can leverage Trov’s developer-friendly APIs and UX libraries to get to market quickly and effectively. Furthermore, partners can play an active role in deﬁning the most suitable coverages for their community of customers.
To find out how you can get started with embedded renters insurance, drop us a line here!