A new tenant moves in, agrees to get renters’ insurance, and nothing after that. Such is the moment every property manager dreads: no policy, no certificate of insurance on file – just silence and unmanaged risk.
Somewhere between signing and move-in day, there’s one step that derails the process, beyond background checks and deposit compliance: insurance enrollment. For a growing share of renters, that step is the one they skip.
It is no defiance; it’s friction. And, for Gen-Z, friction is a dealbreaker. Brandon Tobman, CEO of U.S.-based insurance technology company Get Covered, has watched this pattern play out across thousands of residential units. His diagnosis is blunt: the insurance industry is facing a compliance crisis rooted not in pricing or product, but in process.
“The expectation has fundamentally shifted. This generation didn’t grow up filling out forms; they grew up with services that just worked, like Spotify, Uber, Apple Pay. The moment you ask them to apply for something, you’ve already lost them,” he stressed while in conversation with AI Journal.
The data backs him up: 28% of Gen-Z have already abandoned an insurance provider specifically because of digital friction. Pricing was right, coverage was sufficient, but the process was simply too hard.
In a generation that represents a billion-dollar market opportunity for the insurance industry, this is not a user experience problem, but rather an existential one. AI might just be the key to unlock the industry’s newfound dilemma.
The numbers behind the drop-off
For decades, insurance operated under a simple model: need coverage, fill out a form, wait for approval. The system was a transactional, deliberate and entirely manual one that worked only when every consumer operated the same way – Gen-Z does not.
This generational cohort came of age in an era of ambient technology and services that quietly run in the background without demanding attention or action. Streaming platforms remember where they left off; navigation apps reroute before the user realizes it; financial tools round up change and automatically invest it.
Meanwhile, 84% of younger consumers now actively prefer embedded insurance – coverage that’s built into a platform, a lease or a service – over traditional enrollment models. Gen-Z don’t want to shop for a policy; they want to move into an apartment and have coverage begin, full stop.
The toll of Gen-Z preferences is tangible, especially for industry stakeholders from property managers to insurance firms; 16% of renters, in fact, are choosing to go entirely without coverage rather than navigate a manual enrollment portal.
A tenant without insurance isn’t just exposed – they’re a liability for the property. Water damage, fire, personal injury claims. When a tenant has no coverage, the financial and legal consequences have a way of climbing the chain..
Contrary to popular discourse, this is far from laziness; it’s a rational response to a world where frictionlessness and automation has become the baseline. When every other service in a person’s life requires a single tap, a manual enrollment process feels both outdated and broken.
“They’re opting out because the path to getting covered is too cumbersome to bother with,” said Tobman.
What AI changes
The traditional response to enrollment drop-off has been to add reminders in the form of more emails, portal nudges and follow-up calls from leasing staff.
AI, however, offers something different: removing the enrollment step from the tenant’s to-do list entirely.
A recent survey from Accenture found that 90% of insurers intend to increase AI investments during 2026, with 85% seeing greater benefits for growth than for cost reduction. But, the more immediate transformation is happening at the point of onboarding – not in the back office, but at the moment a tenant signs their lease.
In this new paradigm, when a tenant completes a lease signing, an AI driven system automatically initiates coverage, verifies compliance, and files the certificate of insurance without the tenant ever visiting a separate portal or filling out yet another form. The insurance becomes, functionally, part of the lease transaction.
But, the promise extends beyond C-Suite benchmarks and ambitious scaling plans.
“AI can now factor in everything from a building’s construction materials to a tenant’s claims history in seconds. What used to take an underwriter days now happens before the lease is signed, and the result is pricing that’s more accurate and, ultimately, fairer for the people being covered,” stressed Tobman.
Why “digital” is not enough anymore
The industry’s first response to the digital expectations of younger consumers was to build portals: online dashboards, mobile-accessible forms, email reminders. And, compared to paper-based systems, these were genuine improvements.
But, fundamentally, they misread what “digital-first” actually means for Gen-Z: a digital form is still a form; a mobile-accessible portal is still a portal. Moving a manual process online doesn’t make it invisible – it just relocates the friction.
Tobman was direct about where this falls short: “Legacy digital tools were built around the assumption that tenants would engage with the process if you made it convenient enough. But for Gen-Z, ‘convenient’ isn’t the standard anymore – ‘automatic’ is.”
The “bottleneck” in compliance, which he identified, isn’t on the front-end consumer experience – it’s on the backend.
“Enrollments, certificate of insurance tracking, coverage verification. These are systems that were largely architected in a different era for a different kind of consumer. They may be skinned with a modern interface, but the logic is the same.
Insurers, with the help of AI and machine learning, can use these technologies to understand the behavior and preferences of the consumer and thus offer them customized coverage points. But, most importantly, they can predict when a tenant is likely to lapse out – and take steps to prevent it.
The insurtech industry is a result of this shift, where embedded distribution is on the rise and insurers are partnering with digital platforms to offer coverage at moments of relevance.
The AI layer is what makes embedding coverage into that moment both operationally feasible and scalable.
The bigger picture
The shift towards AI-embedded insurance is part of a broader transformation in how coverage gets distributed.
Funding constraints and profitability pressures are reshaping the insurtech landscape, with acquisition activity rising: there were 21 insurtech M&A deals in the third quarter of 2025 alone, a record high since 2022’s Q2 peak.
The consolidation reflects, more than a maturing market, the rising popularity of platforms which have figured out how to deliver frictionless, embedded coverage.
Meanwhile, for renters the shift means coverage that activates at lease signing, policies delivered to their inboxes before they’ve unpacked, claims processes that begin with a text message rather than a phone tree. Hence, what Tobman deems “invisible insurance”:
“Invisible insurance is the alternative to the present bottleneck. Coverage that activates automatically as part of an existing workflow, requires no separate enrollment, and generates verified compliance records without any action from the tenant,” noted Tobman.
And, for those who have historically avoided coverage because the process felt too much like work, AI-embedded insurance removes the main barrier: they don’t have to shop, compare, or apply.
The era of navigating a separate insurance portal after signing a lease is therefore ending, not because the industry became more consumer-friendly out of generosity, but because AI made frictionless enrollment economically viable – and because Gen-Z made friction commercially unacceptable.
