Can this Williamsburg startup make renter’s insurance fun for millennials?

Tom Austin and Zack Stiefler found themselves in a familiar situation last year. They had just started MBA programs at the Wharton School of the University of Pennsylvania, the best business program in the country. They were about to begin a program that could change the course of their lives, and yet they were on the phone with brokers, navigating GeoCities-era websites, trying to figure out the details of a renter’s insurance policy for their new apartment, of all things.
And so they said what nearly every entrepreneur before has said: We can do this better.
“The crazy stat is that 95 percent of insurance policies are still sold over the phone or in person,” Austin, now the cofounder of Bungalow Insurance, said in an interview last week. “The tech in the insurance industry is at 1995 levels. For 50 years they’ve been relying on the agent model. People in our parent’s generation were insurance agents who the companies could just pay a commission of 15 percent per policy. And so they just never updated. You’d be shocked how much of the insurance world is still on fax.”

The company, based in Williamsburg, officially launched today. (That doesn’t mean this effort is entirely new. Our sister site, Technical.ly Philly, profiled the Bungalow duo last September.)
The idea is no less than to overhaul the user experience of the insurance industry. I asked if it was basically Oscar, the so-called millennial health insurance company of L train fame.

“Well, it’s similar to Oscar in that we’re taking a design first approach to insurance,” Austin explained. “When you go on these other websites it’s impossible to use and they have so much information it’s overwhelming. Young users want to be able to go on and understand what’s going on here.”

But it’s quite different from Oscar in that Bungalow is not going to be an insurance provider. Rather, it’s linking up with the insurance company Homesite. Bungalow does not have the resources or experience to determine appropriate quotes for an entire insurance market, but the cofounders do think they could replace the human agent and make the process a lot simpler for the company and the user, which will make the user come back and use them again for the next thing.

Bungalow is pitching itself to young customers. Millennials who simply don’t have the patience to deal with an ugly website or an archaic system. Being young, this is also a group which rents, and as Austin noted, the number of leases requiring renter’s insurance in New York has gone from about 5 percent 15 years ago to about 40 percent today. So it’s a good market to start with, but renter’s is not the only insurance type which seems to exist comfortably in 1982.