All homeowners care about protecting their properties, but landlords likely care a little bit more than most people do. In addition to taking care of their own homes, landlords are also interested in protecting their investment properties because those properties are their livelihood. In the event that something bad happens to their properties or tenants, their entire real estate empire could be compromised.
For these reasons, landlords typically need more coverage than just homeowner’s insurance. In order to protect their investments and their careers, landlords also need landlord insurance. And if they want additional coverage, they should also institute policies that require their tenants to get renters insurance.
If you’re looking to take your P&C insurance sales to the next level this year, pushing landlord and renters insurance can be the perfect strategy. For example, one study found that a whopping 70 percent of millennial renters don’t have renters insurance. That being the case, P&C insurance companies have a good opportunity to tap into this market and drive more insurance sales.
Before you do that, let’s take a step back and look at the differences between landlord and renters insurance to give you a better idea of what they cover.
Landlord Insurance vs. Renters Insurance:
What You Need to Know
Although landlord insurance and renters insurance both apply to rental units, they’re different kinds of insurance products. This probably won’t come as a surprise, but landlords pay for landlord insurance, and renters pay for renters insurance. But what exactly does each type of insurance instrument cover? Let’s take a look.
At a high level, landlord insurance is designed to protect real estate investments. These insurance products typically cover the dwelling itself, property damage, personal property used to maintain the rental unit (e.g., a lawn mower), and loss of use (e.g., if the dwelling is flooded and a tenant has to stay in a hotel while it gets fixed).
Landlords who want more sophisticated insurance products can get liability protection to safeguard their building against vandalism and burglary. They can also get additional coverage for properties under construction and properties that need to be updated to comply with building codes (e.g., new ventilation requirements that went on the books after the unit was purchased).
A renters insurance policy typically provides coverage for a renter’s belongings and any temporary living costs they might incur as a result of losing access to their unit due to property damage (e.g., a fire or flood). Depending on the policy, renters insurance might also provide protection in the event that the renter damages someone else’s items or someone suffers an injury in their unit.
What’s more, some renters insurance policies also cover theft. If someone breaks into a rental unit and steals something, the renter may be able to get the insurance company to help pay for a replacement.
Keep in mind that both landlord insurance and renters insurance usually carry a deductible. So whether you’re a landlord or a tenant, you’ll likely have to fork over some cash in order to take advantage of your insurance benefits.
Techniques for Boosting Your P&C Insurance Sales with Landlord and Renters Insurance
As P&C insurance salespeople know too well, it isn’t always the easiest thing in the world to get people to pay for additional insurance products. From a landlord’s point of view, buying landlord insurance can strain their cash flow. And in a world where 40 percent of Americans don’t have $400 to cover an emergency expense, convincing renters to take on another monthly bill might be a tall order.
By developing a smart approach to landlord outreach and engagement, it’s possible to improve your numbers with both of these insurance products—giving landlords and renters the peace of mind that comes with knowing they’re protected in the worst-case scenario while helping your agency bolster its bottom line.
With that in mind, let’s take a look at four techniques you can consider as you begin driving more insurance sales.
1. It’s all about protecting their investment
At the end of the day, it’s all about landlords protecting their own investments. Although landlord insurance isn’t required by law, landlords should be privy to the fact that traditional homeowner’s insurance policies are unlikely to cover most of the damages that occur in rental units. Further, in the event that the rental unit is damaged and in an unlivable condition, landlords might be on the hook to pay for their tenants’ temporary living arrangements while the unit gets repaired.
Nobody goes into business as a landlord because they are thrilled at the prospect of losing money! By investing in landlord insurance, property owners can rest comfortably, knowing that their investments and business are both protected even if the worst were to happen.
2. It’s often an affordable form of insurance
Suffice it to say that real estate does not come cheap in the United States—particularly if we’re talking about high-end markets such as New York City, San Francisco, and Denver. It’s common for property to cost hundreds of thousands or even millions of dollars.
Owning rental properties is a major investment. There are many unknowns, too. Chances are that tenants will be strangers when they move in, and landlords have to cross their fingers and hope they’re renting to respectful people who will treat the property like their own. But as everyone knows too well, that’s not always the case.
By buying landlord insurance, a landlord is protecting what is almost certainly one of the biggest investments they’ll make in their life. Plus, they may be able to incorporate landlord insurance costs into the monthly rent, enabling them to pass some of the costs along to the renter.
On the flip side, renters insurance is also relatively cheap. For example, a tenant might be able to secure $25,000 of coverage for something like $150 per year. Although it’s unlikely that their unit will be destroyed in a fire, many people would probably agree that it’s worth paying $12 a month just so they don’t have to start from scratch if they lose everything.
3. It’s a great mechanism for mitigating risks
Imagine a landlord’s apartment rental business is chugging along. All of a sudden, a pipe bursts. As a tenant scrambles to remove their belongings from the apartment, they fall down the stairs and suffer an injury. With the optimal level of insurance in place, the landlord will be covered in the event that any of these unpredictable scenarios unfold.
By coming from a point of understanding and trust—and knowing the risks that come with being a landlord—you can position your agency as a trusted source of knowledge for all things insurance. Clients won’t even think about looking for insurance products anywhere else.
4. It’s all about education
Recall the stat from above: 70 percent of millennials don’t have renters insurance.
One way your agency might be able to make inroads into this segment is by creating content around the importance of landlord insurance and renters insurance and sharing that content on social media and through email marketing. After all, you can’t expect tenants to buy renters insurance or landlords to buy landlord insurance if neither knows the products even exist.
Similarly, you may want to encourage landlords who buy insurance from you to require tenants to carry renters insurance, too. You might even offer to pass along a discount on their landlord insurance, depending on the scale of their operation.
Looking to Boost Your Sales Through Streamlined Lead Distribution? AgentCubed Can Help
If you’re looking to sell more insurance products, landlords and renters insurance included, implementing software that can streamline your lead distribution can really help—particularly as your organization scales.
For example, AgentCubed gives you access to powerful lead automation and distribution tools, robust policy management functionality, and an end-to-end customer relationship management (CRM) solution that enables you to optimize your relationships while automating outreach and personalizing experiences.
Request a demo of AgentCubed today to learn more about the easiest way to increase your P&C insurance sales with landlord and renters insurance.