Many millennials are graduating from high school and starting college, and moving on to these next chapters in life can be exciting but also quite stressful. Navigating life with more responsibility than ever before can be overwhelming, especially when subjected to a chaotic lifestyle filled with piles of homework, extracurricular interests, and the need to earn money at jobs that are squeezed in between classes. Millennials have a lot to focus on, which is why I wasn't surprised by a recent article from PropertyCasualty360 reporting that millennials are most likely to rent homes but the least likely to purchase renters' insurance.
According to recently conducted surveys, 66 percent of 18 to 29-year-olds rent their homes, but nearly 70 percent of those millennials don't have renters' insurance. When asked what was keeping them from getting coverage, a majority explained that cost wasn't the primary reason they chose to go without coverage. Instead, 61 percent of millennials skip renters' insurance because they believe their property is secure enough and safe from potential damages; 43 percent claim they do not have enough property to insure; and 41 percent report not understanding how the product works.
66 percent of 18 to 29-year-olds rent their homes, but nearly 70 percent of those millennials don't have renters' insurance
This lack of understanding among
millennials can make it very difficult to sell renters' insurance to younger clients, and busy schedules make it much less likely that they will take time to research the benefits on their own. Here are four tips for overcoming these obstacles and clearly communicating the importance of renters' insurance to this large potential market:
Breaking renters' insurance down to its three main components will help millennials have a better understanding of the coverage it provides:
Personal Property coverage: Clothing, furniture, dishes, electronics and other contents of their home are covered. To get a rough idea of the dollar amount of coverage needed, the customer should add up the cost of replacing every major item in their home and then double that amount.
Liability coverage: This component is important because it can protect clients from financial loss resulting from a lawsuit for claims that come within the coverage of the insurance policy. For example, if someone is injured in their home, renters' insurance can cover clients in a lawsuit that might ensue.
Additional Living Expense: If a client is unable to stay in their apartment after a covered loss, this coverage reimburses the client for reasonable costs of temporary lodging up to the policy limit.
Explain all of the choices the client has, and let them know that they can take their time to do research before making a decision. Millennials will appreciate having time to consider their options and will feel empowered by the opportunity to independently make a mature decision.
Though $100,000 of liability coverage comes with most policies, many renters don't realize they can increase this. In most cases, one can get $500,000 in coverage for about an extra $20 per year, so take time to discuss this with your clients.
Renters' insurance usually covers water damage from plumbing problems and personal property damaged in natural disasters, but not all policies cover flood damage caused by natural disasters. Therefore, many renters may need to purchase additional flood insurance, and this is especially important to discuss with clients living in flood-prone areas.
As you lay out the available coverage and costs associated with losses, the decision to purchase renters' insurance should become easier. Renters' insurance is a wise investment that millennial clients shouldn't miss out on simply because they lack awareness. By taking time to share these facts, your clients will be more likely to purchase the coverage and could even gain a better understanding of insurance that will benefit them in the future. Who knows? Maybe they'll thank you later!
Ryker is a multimedia storyteller with interests in writing, video, photography and design. He is on a quest to visit all of the U.S. national parks, and is almost always planning his next camping trip. Combining passions for travel and creative communication, he draws from his experiences to share stories of safety and adventure.