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Madison-based insurtech startup SafetyNet launches new insurance program

Renter SafetyNet, a new insurance program from CUNA Mutual Group’s innovation lab, was launched today in Wisconsin. In a shifting housing market where more people than ever are renting rather than buying, Renter SafetyNet is a first-of-its-kind program created specifically for landlords to come out of the Madison-based insurance tech startup, SafetyNet.

PEW research put out that renters are at a 50 year all-time high. The rental market is growing, but on top of that, rental prices are increasing,” said Danielle Sesko, Director of Innovation and Product Development. “The average living wage for a two-bedroom apartment is actually over $21 an hour. That’s over three times the federal minimum wage. It’s significant, and it’s putting financial stress on the average hardworking American.”

That stress means that nearly half of all Americans are unprepared for a financial emergency. Almost eight out of 10 workers are living paycheck to paycheck, and about seven out of 10 admit they have below $1,000 in savings. 46% of people say they couldn’t come up with $400 to cover a surprise expense, including rent should they lose their job.

“An income loss can throw a family’s financial security into jeopardy, making it difficult to pay rent and keep a roof overhead, and this impacts landlords’ ability to bring in rental income,” said Dan Murray, vice president of product development at Renter SafetyNet. “A program like Renter SafetyNet not only helps landlords protect their income, but also keeps tenants in their homes.”

Renter SafetyNet works by providing landlords with a lump-sum payment to cover a tenant’s rent after a no-fault job loss like a layoff, illness or injury. Proved claims are mailed out within two to three business days and cover rent for one to three months.

Coverage for landlords owning less than 40 rental units starts at $5 a month. Sesko said that the majority of landlords own one or two rental property units and they rely month-to-month on the payments from their tenants.

“A lot of folks are using single units or duplexes as a way to supplement their income or a way to get cash flow in their retirement years,” said Sesko. “This helps protect those folks. We found that if a tenant were to default on their rent, both parties really suffer.”

SafetyNet launched their first product a year and a half ago that aimed to increase the financial security of individuals in emergencies like disability or unemployment. That product did well, so they developed Renders SafetyNet so assist on the other end of the financial equation.

“We’re looking at solutions in the market to help other groups of people,” said Sesko. “[SafetyNet products help] the landlord and protects their rental income, but also help people stay in their homes. It’s a win-win for both sides of the business.”

As millennials specifically continue to delay home ownership in exchange for more flexibility in their housing, that change brings a necessary shift in how insurers provide products and services to them.

“The entire rental landscape has been changing over the last ten years due to growing generations, millennials specifically,” said Sesko. “That changes the business models of the landlords who have been renting to other generations. […] Our goal is to run an insurance business that is lean, efficient, cost-effective. We’re trying to build simple and affordable solutions for the everyday hardworking American.”

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Christine McGuigan is the Managing Editor of Silicon Prairie News.

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