In 2022, economic inflation and increasing migration of renters raised renters insurance premiums across the US. In November of 2022, Lemonade commissioned a nationwide survey, conducted by OnePoll, that was later published in December, which surveyed 2,000 renters on their outlook on the renters market.
Of those surveyed, 61% experienced an increase in rent within the past year and 74% expressed concerns over the state of the economy. The report also notes that 63% of respondents have considered moving for cheaper rent due to high costs, and 65% had to look for places to live with the least expensive rent possible. More than half, 60%, had to downsize their rentals due to inflation.
The rental market has been turbulent since the start of the pandemic. A little more than half (53%) of Lemonade’s survey respondents say that at some point during the pandemic, they signed a new lease agreement. The report also surveyed renters of “sweetheart deals”, or unofficial agreements or discounts set with a landlord during the pandemic. Many of these renters are seeing their rent costs increase. Of those who rented with a sweetheart deal, which is 73% of respondents, a large majority report that they regret entering into such an agreement.
“If you followed the real estate market during the pandemic, it was clear that many people were fleeing their big city apartments for the spatial luxuries the suburbs offered—this left many building owners and landlords with empty apartments to fill, but no tenants to fill them. Enter the pandemic bargain, sweetheart deal, or any other name that fit the plummeting apartment prices in cities across the US. City dwellers (or those aspiring to be one) took the opportunity to find their dream apartment at their dream price—but not for long,” Lemonade chief claims officer Sean Burgess writes in an email to Digital Insurance. “According to our recent survey, more than 80% of renters that signed sweetheart deals during the pandemic regret doing so. And when asked, 40% stated it was because their sweetheart deal didn’t protect them as a renter, 32% realize it’s only temporary, and 19% noted it doesn’t offer them stability. Unfortunately, unless a renter has landed themselves in a rent-stabilized apartment (or something equivalent), they’re likely to see a hefty hike in monthly rent once that lease expires.”
Though 65% of respondents expect the rental market costs to continue to rise, “69% are optimistic that their economic situation will improve in 2023,” the survey found.
“The use of technology provides certain efficiencies that, in turn, result in lower costs and fairer prices for our customers,” Burgess adds. “”At Lemonade, our platform was built from the ground up on a digital substrate and powered by AI. For instance, through our chatbots, customers can get a renters quote for as low as $5 in only 90 seconds or file a claim and be paid instantaneously, all of which can be done with zero paperwork.”