How to Start a Renters Insurance Company in 14 Steps (In-Depth Guide)

Updated: February 22, 2024 is reader-supported. When you buy through links on my site, we may earn an affiliate commission. Learn more

The renter’s insurance market in the United States is quite substantial, valued at over $4 billion annually according to IBISWorld. With rising housing costs leading more people to rent rather than own homes, a growing opportunity exists to provide renters insurance to protect tenants’ personal property and liabilities.


Getting into the renter’s insurance business can be an attractive proposition for entrepreneurs or insurance agents looking to expand their offerings. With a consistently growing industry, now is a great time to get involved.

This guide will walk you through how to start a renters insurance company. Topics include forming a business plan through market research and competitive analysis, exploring accounting options like opening a business bank account, registering an EIN, obtaining business insurance, and more.

1. Conduct Renters Insurance Market Research

Market research is important if you want to start a renters insurance policy business. It offers insight into contemporary renters insurance costs, trends in services and products, how much renters insurance customers typically buy, and your target market.


Some details you’ll learn through market research include:

  • Some key reasons renters forego insurance include not seeing value or necessity in coverage, finding it too expensive, and simply lacking awareness that policies exist.
  • With rent prices rising and rents accounting for a greater share of household incomes, insuring personal property is becoming more important.
  • The average renter has around $30,000 worth of possessions that would not be covered in the event of incidents like theft, fire damage, or water leaks without their policy.
  • Landlord insurance only covers the property structure itself.
  • Renters insurance can be a highly profitable product line for insurance agencies.
  • The average annual renter’s insurance premium is approximately $168.
  • Among major carriers with renters insurance products are State Farm, Allstate, and Travelers.
  • Independent agencies have opportunities to develop competitive products and creatively market to untapped renter demographics in their regions.
  • Partnerships with property managers and landlords also offer lucrative lead-generation potential.

Renters insurance represents an over $25 billion serviceable available market ripe for agencies to grab greater market share. With low penetration among renters, limited top carrier domination, and profitable policy economics, the prospects for enterprising renters insurance startups and programs remain strong.

2. Analyze the Competition

Understanding the competitive landscape is essential for effectively positioning a new renters insurance operation. Quantitative and qualitative analysis of key direct and indirect rivals can reveal market gaps to target and inform tactical decisions.


Some ways to get to know the best renters insurance companies in the area include:

  • Regionally, examine property and casualty insurance carriers marketing renters policies both through brick-and-mortar agencies and online.
  • See how businesses offer each renters insurance quote in terms of price range and delivery method.
  • Review available market share data at state levels, coverage offerings, and premium rate filings per competitor from indexes.
  • Evaluate go-to-market strategies including lead generation partnerships, discounts like multi-policy bundling, and referral rewards.
  • Analyze online presences using tools like SEMRush to uncover search volume, digital traffic, backlink profiles, social media engagement, and localized advertising initiatives.
  • Review online reviews and utilize survey data to gauge customer sentiment toward incumbents.
  • Identify specific demographics like millennials, renters of high-end properties, or military families that may be underserved.
  • Monitor venture capital investments and accelerator programs fueling insurance technology startups.

Synthesizing market intelligence through competitive analysis mirrors the customer journey to find weak spots for differentiation. It also steers decisions on product features, carrier partnerships, pricing, distribution tactics, and areas that may need elevated investment like enhanced mobile apps to contend in hypercompetitive sub-segments.

3. Costs to Start a Renters Insurance Business

Starting a renters insurance program requires both upfront investments and continual operating expenses. Based on typical renters insurance cost structures, we can estimate these outlays to budget effectively.

Start-up Costs

  • Initial start-up costs should provide for around 6 months of runway before profitability:
  • Licensing Fees – $2,500 State insurance licensing, legal fees, and corporate formation can cost a few thousand to get approved to transact policies.
  • Office Lease – $5,000 A small office space for 1-5 staff will average $800-$1,500 per month depending on the real estate market.
  • Furniture & Equipment – $10,000
    Desks, phones, computers, filing cabinets, and office necessities can run around $10k initially.
  • Insurance Management Software – $8,000 Premium agency platforms like Applied Epic and Vertafore start around $1,000 per month per user.
  • Staff – $30,000 1-2 initial hires like a Licensed Agent and Assistant at around $60k annually each.
  • Marketing – $5,000 Logo, website, printing, signage, and online ads to announce the launch.
  • Total Estimated Start-Up Costs: $60,500

Ongoing Costs

  • Rent & Utilities – $1,200 Typical cost for maintaining small office space.
  • Software Subscriptions – $1,000 Essential SaaS tools.
  • Salaries – $10,000 Grows as more staff are added to service policies.
  • Insurance Premiums – $2,500 Errors & Omissions, Cyber Liability, and D&O policies.
  • Marketing – $1,500 SEO, lead gen ads, referral fees, and other promotions.
  • Other Office Overhead – $1,500 Internet, phone, supplies, travel, training, etc.
  • Total Estimated Monthly Costs: $17,700
  • Continuing education course fees can run $500+ per licensed staffer

Marketing spending should scale up proportionately as the customer base expands, targeting at least 10% of revenue. Salaries also rise incrementally as more claims staff and support get added to manage book of business growth.

4. Form a Legal Business Entity

When establishing a renters insurance venture, the legal structure carrying the most appropriate liability protections and tax advantages depends on your goals. The four primary options each have distinct pros and cons for this sector.

Sole Proprietorship

A sole proprietorship involves simply operating under your name without a formal company registration. This simplifies paperwork and tax filing through personal returns. However, it provides no separation between business and personal belongings or assets should claims or debts arise, heightening the financial risks of lawsuits common in insurance enterprises.


Forming a general partnership shares profits and managerial duties between two or more owners informally or via partnership agreements. This allows the pooling of expertise and capital from co-founders. However unrestrained shared liability exposure remains among the partners. Troublesome when handling high-value insured property claims.

Limited Liability Company (LLC)

Establishing a limited liability company (LLC) combines pass-through taxation without personal liability for company debts and claims. This makes an LLC ideal for shielding rental insurance policy owners from the acute risks in this market while avoiding corporate taxation levels. Easy to run informally or with an operating agreement among members.


A formal business corporation carries the highest start-up costs but enables company shares, separation of ownership and management, and eligibility for special tax deductions. However double taxation of profits and complex reporting add overhead expenses that may hinder bootstrapped operators.

5. Register Your Business For Taxes

An Employer Identification Number (EIN) serves as a unique tax ID number for business entities to identify them to the IRS and when opening business bank accounts. While sole proprietors can use their Social Security Number instead, having an EIN is recommended for liability protection.

Acquiring an EIN is mandatory for renters insurance companies and home insurance companies, structured as LLCs, partnerships, and corporations. The application to receive an EIN is free and can be completed online via the IRS in just a few minutes:

  1. Go to the IRS EIN Assistant
  2. Select view additional types including view all types of businesses after the nonprofit section
  3. Choose a Limited Liability Company, Partnership or Corporation
  4. Complete the application with the basic entity and responsible party info

Once submitted, you will instantly receive an EIN at no charge to use for state and federal tax filing and other identification purposes when administering your renter’s insurance business.

Additionally, register for any necessary state tax licenses or permits required to legally collect and remit sales tax in the jurisdictions where you operate. Requirements and costs vary by location. Some states have no extra registration needed beyond basic business entity creation documents.

Properly establishing tax IDs streamlines compliance with both IRS and state government reporting for income, payroll, and sales taxes. This enables renters insurance businesses to focus on fueling growth rather than untangling administrative snags down the road.

6. Setup Your Accounting

Having accurate financial statements is crucial for renters insurance enterprises to achieve profitability, safeguard from IRS issues, and position for growth. Investing in tools and services to get the accounting right from the start prevents headaches.

Accounting Software

Using dedicated small business accounting software like QuickBooks allows renters agencies to automate tasks like invoicing clients, tracking payments, and generating financial reports. Integrations with bank accounts, credit cards, and POS systems record transactions in one place for simplified tax prep and real-time visibility.

Hire an Accountant

Hiring an experienced bookkeeping service or accountant provides extra control for reconciliation and trained expertise. They can handle everything from monthly close routines, expense categorization, payroll processing, and insurance audits, and point out potential write-offs. Expect fees of around $100 to $250 monthly for limited-scope bookkeeping and $700+ for comprehensive CFO-style financial oversight.

Open a Business Bank Account

Maintaining completely separate business banking and credit is essential for accurate record keeping. Personal transactions commingling with commercial finances is an IRS red flag that complicates taxes. Open dedicated accounts before transacting renters’ policies or accessing business credit cards.

Apply for a Business Credit Card

Applying for a business credit card utilizes your company’s financial track record rather than your credit score for higher limits. Expect a basic $500 to $2,000 line initially on new business cards from Capital One, Chase Ink, or Wells Fargo. Keep renter’s premium inflows and policy payouts flowing through this commercial card to simplify reconciling program finances.

7. Obtain Licenses and Permits

Before marketing or selling any renters insurance policies, agencies must first secure proper credentials from state departments of insurance and other regulators. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

The central license needed is an insurance producer license that authorizes soliciting, negotiating, and selling renters insurance. Requirements vary slightly by state but generally involve passing a licensing exam, meeting experience thresholds if applicable, and submitting registration paperwork.

Review specifics for property and casualty producer licenses that cover renters insurance in your state using resources like Vertafore and NIPR. Some states like California break out a standalone Personal Lines License while most fold renters insurance eligibility into a Property & Casualty license.

Agents planning to offer insured coverage from multiple carriers will need to additionally complete specific certifications per each partner like State Farm’s LAMP program. This allows submitting applications and servicing policies for clients insured by those providers.

Renters insurance agencies hiring sub-producers or solicitors to origin renters policies under their licenses must register these arrangements with additional Internal Producer Number or Sponsorship filings. Related fees apply per sponsored employee.

Various municipality permits may also apply depending on your office location. Common examples include general city business licenses and zoning permits for any branch signage. Nearby insurance adjusters, inspectors, or restoration contractors hired will similarly need occupational licenses where mandated at regional levels.

8. Get Business Insurance

Operating a renters insurance venture without proper coverage exposes the company to the same risks their policies protect clients against, situations that could severely impact livelihoods. Renters insurance covers renters, but not a renters insurance company. You’ll likely require liability coverage, along with auto insurance and other diverse products.

Various disasters highlight why having contingency planning via business insurance is an absolute must:

A burst pipe in the office damaged computers holding sensitive policyholder data and suspended operations for weeks. Employment practices lawsuits drain finances fast after a wrongful termination complaint. Cybercriminals access bank accounts forcing services shutdown.

All common occurrences where insurance can financially safeguard continuity.

Tailored small business policies bundle offerings with a simplified application process. Coverages like General Liability guard against slips and falls. Commercial Property protects company assets like furniture or electronics. Employment Practice Liability defends against discrimination, harassment, and wrongful termination claims. Cyber Liability insulates against hacking incidents and data exposures.

Primary carriers providing competitive bundles for information sector offices include Next Insurance. Expect basic premiums of around $80 per month. Usage can be tailored higher or lower based on specific needs.

The quick application process:

  1. Calculate the insurance amount needed using small business calculators
  2. Get quotes from multiple commercial insurance providers
  3. Complete the application with details on operations, office, payroll, etc.
  4. Add optional expanded coverages as required
  5. Pay a premium to activate the policy upon approval

Don’t let a lack of contingency planning undermine all the hard work invested to build a trusting book of renters insurance business.

9. Create an Office Space

Having a professional base of operations lends credibility for a startup renters insurance provider forming partnerships with property managers and attracting direct consumer policies. The right workspace balances cost, location, amenities, and room for customer meetings.

Coworking Office

For a more official presence, coworking spaces like WeWork offer convenient month-to-month access to turnkey private offices and common meeting rooms for client consultations. Typical fees range from $300 to $800 monthly depending on the market and desired size. Coworking spaces avoid business renters insurance coverage of your own.

Commercial Office

If signing longer-term leases, standalone commercial office spaces provide the most professionalism with greater privacy and room for policy paperwork organization. Rates average $20-$40 per sq. foot in suburb areas up to $60+ in major metros. Minimums often apply along with extra monthly costs for internet, parking, utilities, and ongoing maintenance.

Retail Office

Since renters insurance involves minimal in-person traffic, retail visibility may not enhance sales enough to justify that premium pricing. Still, some independent agencies opt for hybrid agents and small storefronts in local plazas to facilitate neighborly referrals.

10. Source Your Equipment

Launching a renters insurance venture requires some basic office infrastructure without necessitating major upfront capex investments. Savvy sourcing lets entrepreneurs equip themselves affordably.

Buy New

Buying new computers, phones, printers, and supplies from retailers like Staples and Office Depot provides the latest technologies but premium prices around $2,500 for just desktops and laptops alone.

Buy Used

Purchasing certified refurbished or used equipment through Craigslist and Facebook Marketplace can massively discount costs to around $300 per Windows PC. MacBooks hold a value better closer to $600. Printers are commonly found under $100. The downside risk of older hardware failing quickly.


Renting office gear provides maximum flexibility to acquire advanced systems affordably without large outlays. Rental rates range widely based on equipment types and terms from $20 printers per month to $100 for PCs. Useful for trying options before big buys. Can upgrade anytime.


Leasing over the longer term makes sense once specific needs are clear for those wanting always-current technologies without ownership. Programs like Lenovo’s Tech Upgrade Option cover replacements allowing frequent tech refreshes.

11. Establish Your Brand Assets

Crafting a distinctive brand identity enables renters insurance providers to stand out among regional incumbent carriers and national names when promoting policies to property managers and renters. A memorable logo, professional contacts, and online presence combine to drive brand affinity.


Get a Business Phone Number

Acquiring a unique business phone line through services like RingCentral allows listing a memorable 1-800 number across outreach materials from email signatures to direct mailers. Expect basic plans from $30 per month. Voicemail-to-text transcription aids responsiveness.

Design a Logo

Designing a sleek logo that evokes security and reliability assists prospects in quickly recalling your brand when shopping coverage. Online logo makers like Looka provide countless templates to customize with your business name, region, year founded and other elements meaningful to your mission.

Print Business Cards

Business cards displaying the logo alongside the brokerage license number, phone, and website impress as professional collateral to distribute when meeting landlords and prospective policyholders. Similarly, exterior signage made affordably through Vistaprint signals your firm’s neighborhood presence.

Get a Domain Name

Securing a domain name that matches your brand instantaneously boosts online visibility and credibility via email addresses utilizing your URL. Use domain name registrars like Namecheap to check the availability of your first choice (.com) and variants (.insurance, .insure, etc). Ideally aligns with logo colors.

Design a Website

Building out that domain into a lead-generating website transforms lookie-loos into subscribers and policy shoppers. Options exist for DIY sites through Wix with modern templates and SEO guidance or hire web developers from marketplaces like Fiverr to craft a custom responsive portal optimized for conversions. Expect $500 for contract coding.

12. Join Associations and Groups

Plugging into niche peer groups and associations both locally and online allows renters insurance agencies to trade expertise plus identify carrier partners and referral opportunities needed to gain policyholders traction as newcomers.

Local Associations

In most metro areas, robust Professional Insurance Agents (PIA) chapters host regular mixers alongside lobbying for legislative interests. These serve as ideal networking pools to connect with fellow independent agents and scout mentorship. Regional industry groups like the Independent Insurance Agents and Brokers of Sacramento provide similar access.

Local Meetups

Expand digital networking breadth using local chapters of Insurance Professionals like the Bay Area Insurance Networking Group on Meetup. If you can’t find an event to join, you can create your own.

Facebook Groups

Facebook Groups are a great free and untapped market for many insurance businesses. They provide groups of like-minded individuals for networking, asking questions, and expanding your knowledge base. Try Insurance Professionals to get started.

13. How to Market a Renters Insurance Business

Promoting any startup insurance brokerage is essential to drive brand visibility and acquire market share in the competitive renter’s insurance space. A strategic mix of digital advertising and community networking provides affordable and scalable channels to increase conversions.

Personal Networking

Tap into your inner circle first before investing heavily in anonymous lead generation efforts. Offer referral rewards to delighted customers for sharing your services. Providing policy credits or gift cards in exchange for successful word-of-mouth referrals incentivizes happy renters to endorse your agency to property manager contacts and fellow tenants.

Digital Networking

Digital platforms offer extensively targetable outlets to reach renters insurance shoppers actively comparing options:

  • Google Ads campaigns can optimally segment audiences geographically, by income level and focused keywords like “affordable renters quotes” that indicate buyer intent. Expect costs per click around $2-$4.
  • Facebook and Instagram ads showcase expertise through educational social content and infographics before pitching products. Potential for lookalike targeting once early adopter segments are identified.
  • Launching a YouTube channel with explainer and testimonial videos optimizes organic search traffic and helps humanize your neighborhood experts.
  • Writing guest blog posts for regional real estate blogs exposes your brand to accounted-for renting demographics.

Traditional Networking

More traditional marketed outreach should focus on landlord partners as renter policy middlemen:

  • Direct mailers sent to multi-family buildings and realty offices detailing exclusive policy discounts for their tenants if preferred.
  • Door hangers placed across apartment units during open houses hosted by property managers.
  • Renter insurance education seminars for landlord groups and realtor associations co-sponsored by a trusted apartment branding willing to share optics.
  • Renters’ insurance flyers are distributed as part of new tenant onboarding packets alongside coupons that property offices agree to include.

The most scalable customer acquisition balances digital targeting through segmented ads with analog networking via gatekeepers like landlords and leasing agents already embedded face-to-face with untapped renters insurance audiences. Meet prospective clients where they already congregate both online and off.

14. Focus on the Customer

Delivering exceptional service is how the most successful renters insurance agencies build loyalty and gain referrals in this intimate, relationship-driven business. Policyholders who feel truly cared for reciprocate by recommending you to friends facing upcoming lease renewals.

Keep these tips in mind before handing out renters insurance quotes:

Attentive assistance during onboarding answering common questions about coverage scopes, premium costs, and claims procedures sets the tone for a positive first impression. Policyholders remember agents who patiently explain exclusions in lay terms rather than overwhelming with technical jargon.

Proactively advising on evolving needs as life changes occur builds enduring trust. Check-in when you know a policyholder is moving to confirm proper valuations on any new belongings. Offer added electronics protection as more devices get purchased.

Providing renewal savings opportunities without the insured needing to hunt discounts demonstrates genuine commitment beyond mere transactional insurance sales.

Finally, empathetic claims assistance combines kindness during a stressful incident with efficient coordination guiding each step from filing to funds arrival to preferred contractor referrals for repairs. Renters losing belongings can feel extremely vulnerable. Support with care.

Customer service essentially entails applying the “Platinum Rule”, treating policyholders how they want to be treated. When people recognize an insurance provider values their business and not just their business’s revenue, loyalty follows alongside word-of-mouth referrals to fellow renters.

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