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Clothing advice that brokers should give tenants buying insurance


March 21, 2018   by Greg Meckbach


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Tenant’s insurance is not only unprofitable for many brokers, but it’s also hard to sell because consumers underestimate the cost to replace contents, a Toronto broker says.

Greg Robertson, president of R. Robertson Insurance Brokers Ltd., advises tenants to consider how much their clothing would cost to replace. “I don’t know the true statistic, but I would guess that 90% of all tenants’ insurance policies are undervalued,” he said, meaning the insureds do not buy contents coverage with high enough limits.

A consumer with “just a basic wardrobe” could have $5,000 to $10,000 worth of clothing in it, Robertson said. But consumers tend to “have no concept of the true value” of items – such as winter coats – that they own. “They don’t understand what it’s going to cost to replace everything,” he said. “I think that’s the biggest issue with tenant’s insurance. It has always been frustrating for me.”

Many colleges and universities have school years ending at the end of April. With students moving out of their current housing, there is, in theory, the potential to acquire new customers by selling students tenant packages, Robertson noted.

But for most brokers, developing new business from students moving is a “very big time waster from the standpoint of profitability,” Robertson added. This is because the average tenant’s insurance package costs $200 to $400 a year, meaning the broker would only earn commissions of $40 to $80. This, for a policy that could cost the broker $50 to establish when factoring in the time and effort.

“If you already insure their parents, you will [probably] help them out,” Robertson said of students. “But at the end of the day, is there any money there? Probably not.”

Traditionally, people buying tenants insurance are not interested in the coverage, said Robertson. In most cases, they are buying it either because their broker is giving them a discount on auto insurance if they buy a tenant package, or if the landlord refuses to rent to someone without tenant’s insurance.


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2 Comments » for Clothing advice that brokers should give tenants buying insurance
  1. Darren King says:

    How about looking beyond the profitability of the policy and getting down to the basics of wanting to help a new customer purchase a new policy. A tenants policy, more often than not, leads to a home policy or other lines of business. A broker should never turn away a client, no matter the size, and risk losing them to the direct channel, possibly forever. How many times do we hear uninsured tenants pleading for donations because they have lost everything. It is our duty.

  2. Josie says:

    Does it always have to be about the money? Doesn’t it matter more that these people are properly educated and purchase the protection they need? Or, are we happier paying folks through tax dollars and being prodded for donations to help them out? We pay either way. Why not get these folks to take responsibility for paying their own way and for their own security? If you still feel it’s about the money, then think of it this way: it’s still $40-$80 more in your pocket than you had before you got their business. And quit belly-aching about direct writers taking business away that you can’t be bothered to write.

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