From Coast to Coast With Farmers InsurancePotential lawsuits are everybody’s problem, and you probably own more than you think.Published: August 29, 2018
The West Coast-based Farmers Insurance has been expanding its products and services into the Northeast, well aware of the packed New York renters market. Between comparing some of its customer service options on startups like Uber and distributing information across social media and an updated website and devices, the company hopes to keep pace with newer insurance companies that have eliminated agents. Farmers’ agents are the company’s assets, working with prospective consumers to choose coverage and necessary endorsements, or additional coverage,that reflect their property and legal risks. Quiddity talked with Steve Wardzinski, Farmers’ territory product lead, about the “mental complexion” of buying insurance, the advantage of agents, and the importance of keeping tabs on your stuff, which will inevitably accumulate.
For young, urban single people or couples, what are the most important things about your renters insurance policy to know?
For much of this demographic, renters insurance will be their first insurance purchase after a car. Maybe they didn't even purchase that because they were on their parents’. It's more about the awareness; now they're out on their own. I think it's the understanding that, “hey, I’m now on my own. I need protection for my goods, of which I maybe don't have a lot.” But more importantly the liability piece of it, the awareness that they have a legal liability possibly. They will start to accumulate things—computers, stereos, TVs—even though most will have a laptop and Netflix. The second piece is, “how do I go about what I need to know?” From a Farmers perspective, the distribution channel of having a licensed agent, helping you figure out what it is that you need, as opposed to a direct provider. You may be picking coverage that is good for you, or that you don't really need.
How would you describe the long-term value of protecting yourself with renters insurance versus the short-term value?
The short-term value is pretty tactical: “I have something that's susceptible to a lot, and I should protect that because insurance is a lot cheaper than buying the new thing out of pocket.” If I have $20k in contents, and I have a fire, it's much easier to have spent the $20k a year to replace everything I own. To me, the strategic part and long-term value is, “as I progress more in life, and as i'm more successful, I’m going to accumulate more complexity in my life, and I’m going to have a more complex need for insurance.” The first step is maybe renters, then I purchase a home or a condo, and I have a slightly more complex set of needs. How do I go into life? At some point, you need to speak about that. The mental complexion that I have is that there are risks in the world, and my first shot at it is protecting myself now and the things i own. The long-term is the risk is going to get more complex.
How is your company working to dispel common myths about renter’s insurance?
Maybe the most obvious is the valuation and stepping back and thinking, “hey now, I have a closet full of clothes. I own a couple of suits. Maybe it’s the myth of “I don't own anything worth insuring,” if you step back and look at it some way. The next is the liability section. Society today is pretty litigious. We all see the stories every day of somebody sued somebody for something. The defense piece of that is the ability of a company to defend you in the event of a covered peril in a lawsuit is another big think to think about.
Are there any U.S. markets you’re focusing on in terms of promoting renter’s insurance? Why?
The business model that Farmers has is to provide the correct coverage for an individual consumer regardless of the market. You'll have people in the Midwest or New York City or Los Angeles that need renters insurance. We really are looking to provide a broad range of products regardless of market. Farmers recently moved into some states in the Northeast where we never were. We’re having some success growing those markets. In New York, renters and condo owners make up a greater part of pop than they do in some other markets. We do look at that.
Is there any emerging technology that’s helping your company better connect with consumers?
The specific answer is yes. We launched some Alexa skill capabilities. You can ask Alexa for what you need and get some information. Consumers today are really looking for immediate gratification, 24/7/365. When I have a question, I want the answer, whether I’m on a computer or smartphone or tablet. We look to be on those platforms. Our IT team is looking at a new platform that will replace a legacy platform, and we’re in the process of rolling that out in some of our states. From customer service to the distribution of salesforce, we’re always looking very critically at the system we use and touch points we have, thinking of how can we make this easier and more intuitive for the customer?
What’s one way you recently revised your renters insurance to reflect broader market trends?
Making an investment in how the customer can reach us, and what is their customer experience like when they do reach us? The after purchase experiences we look at to make sure: are these as good as they can be? Our towing service that we just updated is a little like Uber. Now the way Farmers reports towing claims is, you can report it on your mobile app, and you can track it.
What specific features make your renters insurance easy to access? How about to renew?
You can go to Farmers.com, and it'll find an agent or give you a list of agents near to you. You can contact one of the agents, tell them what you need and get a quote. Renewals come out automatically at your expiration date of 45 days, 50 days, 60 days in advance of a renewal.
How are you thinking about needs of pet owners in your renters insurance policy?
We don't really offer pet insurance, or medical insurance for pets. We do offer through a third party; we can provide pet insurance in that matter. The pet insurance is one of the liability pieces that someone who is young might not think about. There's a liability part even in the cleanliness of animals. The liability piece does give some protection in the event a dog bites someone.
How are you thinking about needs of people who work from home or have frequent guests?
The work-from-home part is probably the more intriguing part; if you have guests on the property, the policy is not very unusual. You have liability coverage and a deductible, to the extent there's liability insurance or something with a covered peril. For someone who has a work-from-home endorsement for a small business conducted in the home—for an accountant, for example, for this time of year—there are endorsements that provide for that. Liability exposure—if you have customers going for equipment, if somebody is dropping off or picking up on those types of things—you can purchase an endorsement for that as well.
What’s your greatest advantage as a legacy company? What’s your greatest disadvantage?
We addressed one of our strategic advantages by expanding into the east, which will see the population and opportunity. There are lots of distribution channels available. I can go on the web with Progressive or Geico, I can go to an independent agent. Our greatest advantage is truthfully our agency force. They're the group that can best assess each individual customer and what their insurance needs might be, and how to get the best coverage to protect themselves.