What Do Janet Yellen And T-Notes Have to Do With Renters Insurance?

What Do Janet Yellen And T-Notes Have to Do With Renters Insurance?

What Do Janet Yellen And T-Notes Have to Do With Renters Insurance?

Alan Greenspan.  Ben Bernanke.  Janet Yellen.  All names you know, or probably should know.  The first two are former chairs of the Federal Reserve, Yellen is the current chair.

They make economic policy for the country and set interest rates, of course.  But you’re on a renters insurance website, not an economic policy website.  So why are we talking about the Fed Chair?

In addition to setting general economic policy, the Federal Reserve sets the base interest rates from which nearly all others are derived.  One of the most common benchmarks of economic health is the 10 year T-note.  Widely considered to be the safest available investment, they’re heavily invested in by insurance companies.

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North Carolina Renters Insurance Rates Set to Increase 35%

NC GenericNorth Carolina renters insurance, from Charlotte to Asheville, is about to get more expensive from all carriers.  If you don’t have a policy, you’d be well advised to get one now at current prices so the increase doesn’t hit you until the next renewal.  Why, you ask is it going up?  Because North Carolina has a Byzantine system for setting rates.

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If Health Insurance Cost Just $15, Would More People Have It?

If Health Insurance Cost Just $15, Would More People Have It?

If Health Insurance Cost Just $15, Would More People Have It?

A water cooler discussion triggered us to think about the ACA and renters insurance.  Everyone understands the value of and need for health insurance.  But it’s expensive.

On the other hand, many people don’t see the value in renters insurance so they don’t have it.  If health insurance was priced like renters insurance, would more people have it?  If renters insurance was priced like health insurance, would more people have it?

Currently only about 37% of renters have renters insurance or liability coverage of any kind.  In a previous post, we discussed whether renters insurance should be legally mandated, though it was a bit of a “modest proposal.”

Ultimately, there would be benefits to requiring renters insurance.  Property managers wouldn’t need to spend time educating residents on the benefits of renters insurance, nor arguing with tenants about a nonexistent “right” to avoid renters insurance.  Personal liberty is actually a common argument used by tenants who don’t want to bother getting coverage.

In order to get broader penetration to protect both tenants and property managers, we’ve identified three main categories that both property managers and the insurance industry as a whole need to work on.


Renters often believe mistakenly that they can’t afford renters insurance.  While that may be a misconception, it’s a popular one.  The insurance industry has done a great job keeping renters insurance premiums down, it still only costs about fifteen dollars a month.

How can the perception of affordability be created, though?  Comparisons to things like food delivery are common, but only go so far.  Some people wouldn’t spend fifteen bucks to have a pizza delivered, so it doesn’t ring true with them.

Effective Coverage offers multiple renters insurance programs, some of which build the cost into a tenant’s rent rather than a separate bill.  These programs have wildly successful penetration rates, and because the resident is only writing one check that they’d write even without the insurance cost, the cost is perceived to be lower by the resident.

Pricing transparency is, of course, crucial.  It’s not a good idea to just bury the cost of insurance or a waiver in a line item on a resident’s bill.  But explaining the cost and why they pay it is much easier when it’s a part of the rent.  That’s due to many factors, not the least of which is that they’ve already committed to paying you hundreds or thousands of dollars a month, another ten or fifteen dollars isn’t likely to raise their eyebrows.


Residents need to understand why renters insurance is so important.  After every fire loss, the take rate in the affected community increases dramatically because they see the need in very real terms.  Residents need to understand what happens when they have a judgment for tens of thousands of dollars following them, and how renters insurance can prevent that.

Tenants also have a very common misconception about who’s responsible for their personal property after a loss.  There’s a unique opportunity for education here on the part of the insurance industry and the property management industry.  It’s imperative that we begin to brand into every single tenant’s mind that their personal property is their personal problem and that property management has no responsibility for damage or loss to that property.

Another education opportunity is to help tenants understand additional benefits of renters insurance other than liability and personal property coverage.  Very few residents have any idea that loss of use or medical payments to others are part of the policy.  Education on the benefits of any product creates value in the consumer’s mind, and renters insurance is no exception to that truism.

Ease of Access

The insurance industry as a whole thinks they’ve got this covered with online binding of policies, but it’s not as effective as most think.  It’s all well and good to sell a policy online, and that helps accessibility somewhat, but it’s imperative that information be available to the insured even during the quoting process if they need more data on a particular coverage or how to calculate how much coverage they need, for example.

Effective Coverage works to not only offer instant online renters insurance quotes, but also to make sure that the insureds are able to get the information they need at every stage of the process.

Another ease of access issue is solved by linking from community websites to the renters insurance provider, as many properties do for Effective Coverage.  Beyond that, extended service center hours and simplifying the entire process allows for more access.

Different people purchase products in different ways.  Each of those customer types needs to be accommodated.  More importantly, reminders need to be available such as brochures in the leasing office.  While there are not state exchanges for renters insurance as there are for health insurance, there is one-stop shopping.

In summary, property managers and the insurance industry can drastically improve the number of insured renters by working to facilitate ease of access, education, and affordability.  This is a long term joint project for both groups, and one which brings many benefits to property management partners.