Feedback on an idea for fundraising?

[sbeans24]

hey guys! I was part of alpha phi back at college many years ago.

I thought I'd throw out a few questions to this group on something I'm working on. I don't know if there are many great fundraising tools out there today (there weren't when I was involved).

I'm working on a product that lets groups get together to buy insurance....so let's say 30 sisters could pool a few dollars a month ($5-$10) to insure their property (like laptops, phones, bikes, or other things). They'd be fully covered against any damage. If there's money leftover at the end (because we trust our fellow house members to take good care of their things!) that would go back to the house's social budget.

Would you guys consider using something like that (if your house could make $1500 or more every year for every 50 or so people)? Or is that just not enough $ or not something you'd want? Just curious, since we were thinking that fraternities / sororities are already trying hard to fundraise, and are tight knit, so they trust each other to be careful w/ their things.

This isn't a spammy message, I promise. Any thoughts would be super helpful, or send me a direct message. Thanks!

[Kevin]

So renters' insurance, basically? That is a product which alreday exists. Also, insurance is one of the most heavily regulated industries around and I've never heard of a mom 'n pop startup insurance company. I'm sure your state has a whole relevant set of rules and regulations. This is probably not a workable idea without significant startup money.

[sbeans24]

Hey Kevin, Actually, not renters insurance but property focused to start (bikes, phones etc). yes, well aware of all the regulations here! we would be an approved provider with an insurance company backing us as well.

[DubaiSis]

I wouldn't touch that with a 10 foot pole. The liability would be astronomical. It sounds like MLM at its absolute worst.

[33girl]

If parents have homeowners insurance and their property is included, can't the kids who still have their parents' home as their permanent address be covered as well?

[amIblue?]

Originally Posted by 33girl

If parents have homeowners insurance and their property is included, can't the kids who still have their parents' home as their permanent address be covered as well?

Yes. It is covered under the parents' homeowners policy. But also, minimal renters insurance limits are ridiculously cheap. $10 monthly would buy enough to cover most college students' possessions.

I don't know why anyone would want this instead of an existing product.

[sbeans24]

this isn't for renter's. but thanks for the feedback!

[LAblondeGPhi]

Originally Posted by sbeans24

this isn't for renter's. but thanks for the feedback!

I know you keep mentioning that this isn't renter's insurance, but I think it's just an issue of semantics. Posters keep bringing up renters's insurance because it does the same thing you're talking about: cover personal property and possessions, including laptops, bicycles, etc. I would think that most college students are eligible for either renter's insurance (living in a dorm, apartment or sorority house), or their parent's homeowner's insurance.

Here are my other concerns about the product:
1) The target audience: college students aren't typically clamoring to get themselves insured on things. Look at health insurance as an example. I would bet that you aren't going to get a really high sign-up rate in any given chapter. If you got 10% of a college chapter signed up, I'd consider that a miracle.

2) Is this a business plan for you, or a non-profit plan? Are you looking for this product/service to make you a profit? The cost of insurance is typically calculated to cover risks to the insurer plus reasonable profit. I don't know particulars about the industry, but it does seem to me that insurance has gotten more competitive (read: lower margins for the insurance industry) because of technology and bidding mechanisms. I'm thinking that in order to make this work so that chapters raise any money, you're going to have to charge each policyholder more than what they would pay elsewhere.

Out of curiosity, when you say that this is something you're working on, do you mean that you're personally working on this as a startup concept? If so, there's a lot of great entrepreneurship information out there on how to vette ideas. In particular, the concept of "failing fast" comes to mind here - if you have a stinker of an idea, figure it out fast and let it go.

[PaddyMaxwell]

Given the strange things that often go in with these locations (not gonna elaborate), the busy schedules, lack of sleep, and ease of damaging said goods, I would not expect this "venture" to do very well without a thorough and complex contract which would certainly ensure a sense of enmity from those it legally did not cover.

[PaddyMaxwell]

You would do far better to find something tangible and physically sell it in some manner.