Eric Narcisco
CEO
Effective Coverage
Albany, N.Y.
Years at company: 8
A business plan rises from the ashes: Effective Coverage is an online independent insurance agency that specializes in Renters' insurance. The idea for the agency was actually my thesis project for my finance MBA, which I finished in 2006. At that time, I was working at Chubb as an underwriter for a property book of business. My thesis also drew from experiencing an apartment fire back in 2001: A maintenance guy was fixing some pipes in a unit below mine, and he lit the building on fire. I didn't have Renters' insurance and lost a significant portion of my belongings. I realized that Renters' insurance is an underrepresented product, so I created a business plan.
Pitching my idea — a "brutal" experience: I presented my thesis to Chubb, but they passed, as the market wasn't where they wanted to be at the time. I went from carrier to carrier, hoping one would say yes. It was a brutal experience. I didn't have an insurance agency, and had no book of business. I just had a concept and a 50-page business plan. In 2008, Travelers saw the opportunity and agreed to underwrite the program. Seven years later, we work with multiple carriers and cover renters in nearly every state across the country.
How we handle lead generation: We work specifically with large property managers who encourage their tenants to get Renters' insurance. We are part of their leasing process. We have a proprietary agency management system where a landlord can see who has insurance and who does not. We also give brochures for property managers to distribute to their renters to remind them to buy coverage. If renters already have a policy, we offer to review their Auto insurance, which is our next biggest coverage area. Our average-size property manager has a portfolio of communities with 7,000 to 8,000 units. Each community will typically have 200 units.
The mind of a renter: Less than 50% of renters are insured, and I think there are three reasons why. First, people don't think they need the coverage because their landlords have insurance. What they don't realize is that the landlord has no financial interest in a renter's personal property. Second, people think they don't own enough things to warrant buying insurance. Unfortunately, those renters who own the least generally also have limited financial resources to help in a catastrophe. Third, people don't realize what other things Renters' insurance provides, such as being put up in a hotel room if you have an apartment fire, or paying for liability protection should they cause bodily injury or property damage to another.
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