Why sell a renters policy to a client when it only pays you $25 in commission?

June 3, 2022

The short answer: Bigger profits! (For the long answer, keep reading below.)

It’s no surprise that many homeowners start as renters first. There’s a logical progression to it. Well, according to recent research,[1] renters who move on to home ownership don’t move on to another home insurance carrier. Instead, they tend to stay with their carrier—both during the move and for a significant amount of time after the move.

Knowing this, many carriers and agents simply assume that if they sell a renters policy to a customer and nothing goes wrong, they’ll automatically get their homeowners business as well. If only it was that simple.

To achieve customer loyalty, carriers should urge agents to nurture a relationship with their renter customers long before they become homeowners. They can do this by dispensing solid insurance advice, and describing the differences in company financial strength, coverages and service experiences.

Then, once agents have earned their clients’ trust, they can be there for their auto, umbrella and other needs, as well. Put simply, today’s $25 commission can easily become tomorrow’s multi-account, $1,000-per-year client.

Some tips for agents

To help agent’s achieve this long-term customer loyalty, keep these tips in mind when you discuss your client’s insurance options with them.

Help them keep their assets top of mind. Right after an emergency is not the best time for your clients to think through the value of household items. When possessions get damaged or stolen, your clients want to think about getting back to normal. Recommending that your clients create an easy-to-update home inventory—as simple as walking around the house with a smart phone and recording pictures of household items—can be invaluable when your client needs to make a claim.

Help them to know their carrier. Our research indicates that most renters want to keep the same insurance company when they become homeowners. However, it still can be difficult for insurance company’s to create customer loyalty. One way to introduce your clients to a company is to describe what coverage the carrier can offer that they may need in the future. For example, you can say: “This company offer jewelry coverage at a package discount when you get engaged.” This will give the customer confidence of protection in the future. If you take the same initiative with insurance options for pets, floods, cyberliability, auto insurance, or “protection with an umbrella when your limits are not enough” and customers will gain trust in your advice.

Become part of their future plans. Agents tell us of clients who turn to them for advice on title insurers, real estate agents, car buying, repair firms, etc. You can be their go to connection. For example, if a homeowner is hosting a party offering cocktails, agents can make sure that the homeowners policy includes liquor liability. With a little conversation about a client’s upcoming plans, you can become indispensable.

Many clients only engage with their agent when purchasing a policy, dealing with a claim or in response to a rate increase. You can be proactive with regular communication touchpoints with clients. Foster your relationships with renters and they will reward you with a lifetime of shared peace of mind.

[1] Plymouth Rock Home Assurance Corp.

Bill Martin
Plymouth Rock | + posts

Bill Martin is the president and CEO of Plymouth Rock’s Home Insurance Group at which he oversees the business’s operations and reinsurance program. Bill has 35 years of experience in the property/casualty insurance industry. He has held senior positions at Farmers, Great American, Progressive and Travelers. Prior to joining Plymouth Rock in 2016, Bill was president of Bankers Insurance in St. Petersburg, Fla. He has a B.A. in political science from Stanford University. He is an avid sailor, skier, trombone player and sports fanatic.

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