New Ideas, Options For Renter's Insurance

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“New and improved” is a popular label on everything from detergents to wrinkle creams. But insurance, particularly renter’s insurance, what could add zest to this product, which many renters don’t even purchase unless required by their landlord?

A greater number of renters has made insurers compete harder, notes Michael Barry of the Insurance Information Institute.

Moreover, online start-ups are devising new ideas for renters who don’t want to pay the full security deposit and need someone to guarantor on their lease, and they’re aiming to offer cheaper policies.

And while it may not make the wish lists of many renters, it often tops their regrets.

“The vast majority of the tenants who call our hotline with problems – like a break-in or water damage to their possessions – that would require renters insurance do not have it,” says John Bartlett of the Metropolitan Tenants Organization.

These policies average about $20 monthly nationwide, says Barry, with higher charges in states like Texas and Florida that suffer more weather disasters.

The new online start-ups often charge less than traditional insurers. For instance, Lemonade, currently operating in some dozen states advertises coverage starting at $5 monthly.

Online firms, which don’t provide any in-person interaction to customers, operate at low-cost, and are able to offer cheaper coverage. But some renters “are willing to pay a little more for personalized service,” Barry says.

And, traditional firms are devising new twists to enhance policy appeal. For instance, Travelers Cos., is now selling a policy in New York that will travel with the renter when they move to a new apartment.

Besides traditional policies, one online entrant, Jetty, partners with several apartment firms, offering renters to pay 17.5 percent of the required security deposit to the online firm, instead of the full [usually refundable] amount to the landlord. And, Jetty charges about five to 10 percent of rent to act as a “guarantor” when a landlord requires that, provided the renters’ credit profile is approved.

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