The renters insurance market has been a hard nut to crack for the industry, but an insurance carrier and online rental service platform hope their partnership may be the secret to breaking through.
Cozy, an online property management site for landlords, property managers and renters, has partnered with insurance carrier Assurant to offer renter’s insurance through Cozy’s online property management platform.
“We started looking at how many people in our market — the smaller, independent rental owners — have tenants who carry renters insurance and based on our evidence, it is abysmally low,” said Gino Zahnd, CEO and founder of Portland, Ore.-based Cozy. “We saw an opportunity to come into the market and educate people why it is important.”
The Cozy online property management platform handles the entire rental process for landlords — from online listings, to tenant applications and screenings, to receiving rental payments. And now, it sells renters insurance, too.
The company was founded in 2012 and currently has 500,000 people signed up for properties through its site in more than 15,000 zip codes across the U.S., according to Zahnd. Cozy’s “bread and butter,” Zahnd said, are individuals who manage or own 20 or less properties, but it does have customers with up to 200-250 units as well.
With the new partnership with Assurant, tenants of landlords that require renters insurance can obtain Cozy Renters Insurance. Through Cozy’s platform, landlords who want to require renters insurance on a lease check a box in the Cozy system and renters will be offered the Cozy product during their rental agreement transaction. The landlord will be notified when coverage is obtained and sent proof of insurance.
When coverage is not required, renters can still opt to see an insurance quote and purchase coverage through Cozy. Renters can pay for their coverage every month when making their rental payment.
Cozy Renters Insurance is a baseline policy that covers renters from the unexpected loss of property in case of theft or other damage. The coverage also protects against a renter accidentally damaging the rental or someone else’s property, and covers the cost of repairing damages or replacing belongings.
It includes $100,000 in liability coverage and $15,000 in personal property, with a $250 deductible. The cost of policies varies from state to state, but averages around $10 to $20 a month. Additional coverage options are available for renters by working directly with Assurant.
Zahnd said until now, it has been difficult for landlords and tenants to navigate the renters insurance market and know where to go to get coverage. He says Cozy is at a big advantage because it has a captive audience right there on its platform.
“No matter how cool or amazing a standalone renters product is — it’s still not solving the fundamental product for renters and landlords — the process is still so fragmented,” he said. “Neither party with Cozy has to go out and look for something else.”
According to Brian Ellin, vice president of Product for Cozy, the company wanted a simple policy for its rental and landlord users. And because Cozy already has facilitated the relationship between the landlord and the tenant and verified a person’s identity, the basic underwriting information needed to quote and offer a policy is readily available.
“A lot of the questions have already been answered and the renter can get an instant quote,” Ellin said.
Zahnd said the idea for Cozy to offer renter insurance came early in the formation of the company, but Cozy only began actively working on bringing that idea to life about 18 months ago when it began approaching insurance carriers.
Zahnd said they were met with an openness by the industry, “generally speaking,” but that they did have to do a good bit of convincing on why it was a good idea.
“Explaining how this could work to companies that have been around for 100 years or more was a bit of a challenge, but most carriers have a fairly robust technology group,” Zahnd said.
Simplicity and speed on the insurance side were essential to Cozy, so part of its carrier vetting was to understand how quickly the product could be built and how flexible the carrier would be in meeting Cozy’s experience requirements.
“By no means was it easy,” Zahnd said. “When you bite something off like this you have to be stubborn.”
Ellin said they found insurance companies were excited by the idea of gaining access to a market that has been traditionally difficult for the insurance industry to tap into once they understood how the product could work.
“The way that Cozy has taken ownership of that part of the market gives them access that they didn’t have before,” he said.
In March, Cozy began its partnership with Assurant, which was also looking to further develop its digital capabilities and serve a market segment that has been ignored, said Steven Hein, senior vice president for Assurant, and oversees the company’s Multi-family Housing business.
“We have been looking in that space for someone to emerge that has the capability and focus,” Hein said. “It felt like a natural fit between our two organizations.”
Assurant currently offers 1.5 million renter policies nationwide, but Hein said it is a segment that hasn’t had a lot of access or been marketed to. He added only a small minority of residents purchase coverage at all, and that leaves property owners or landlords exposed.
“Our goal is to bring affordable access to coverage and to serve the client’s needs, which is ultimately the landlord,” he said.
He said the hallmark of the product is the speed with which the coverage can be purchased and that ensures users are not disrupted. “Offering the policy in minutes is something that is essential to the transaction,” Hein said.
Zahnd and Ellin said the company’s main priority is to offer a simple policy to get renters covered and ease the burden and exposure for landlords. For now, Cozy doesn’t have any plans to offer additional coverages or expand into other markets, but, Zahnd says, “never say never.”
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