The Ridesharing Opportunity for Insurers
Companies such as Uber, Lyft and BlaBlaCar are leading a booming ridesharing market, which presents an opportunity for property and casualty (P&C)/general insurers (GI).
The much discussed ridesharing “insurance gap” occurs when a driver is logged in to the rideshare application (such as Uber or Lyft), but doesn’t have a rider at the time of an accident. This is referred to as “period 1” by insurers/the industry.
The big companies have traditionally argued that this wasn’t their responsibility and personal policies didn’t cover period 1 because it was perceived as commercial use.
“Companies like Uber and Lyft have clearly prioritized growth over issues like insurance and we are finally starting to see a few companies come up with viable hybrid policies,” said Harry Campbell, who is known as The Rideshare Guy.
With car ownership declining, insurers have to go where the potential revenue is. They are exploring programs such as temporary insurance. For instance, drivers in the UK can obtain temporary car insurance for a period between one and 28 days – with prices starting at £20 for a day (up to a few hundred for a month), determined by the car and driver.
…And the Challenges
The ridesharing market isn’t simple for insurers. Many of them perceive the market as too expensive and potentially risky. Rideshare drivers often incur additional risk, because they are driving more miles/kilometers over a longer period of time than the average driver.
With peer-to-peer sharing, complicated situations can arise depending on who is driving, when accidents occur and responsibility for vehicle maintenance, to name just a few potential issues.
Regardless of the risks, Jesse Mata, product management director for USAA, encourages insurers to try and capitalize on the ridesharing trend. “Let’s see if we can be where our members need us to be, even if that means stepping outside of our comfort zone.”
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