Today we’re going into more detail about our new upcoming subscription car insurance product. We’ve been doing lots of work behind the scenes and we want to use this blog post to share this with you. From the basics, to how it works, and how we will be rolling it out over the next few months.
What is subscription?
The new subscription product is designed for car owners who don’t drive very often. It’s a low monthly subscription that fully insures your car to sit parked on the side of the road whilst not being driven. You can then buy 1 – 72 hours of cover to take it out on the open road. If you don’t drive very often, maybe only use your car on the weekends, you could save up to 70% compared to an annual policy.
Why we created it
At Cuvva, our goal is to make insurance more flexible and fit your lifestyle freeing you from the rigid insurance industry. Our first product, Cuvva Hourly, was created out of the frustration that Freddy, the founder of Cuvva, experienced when he wanted to get insured on his friend’s car in order to pop down the shops, when he wanted to.
The subscription product is born out of the frustration of not being in control of how much you pay to insure your car. It just doesn’t seem right to pay over £1,000 a year to have your car insured 24/7 when you’re only going to use it for an hour or two at the weekend. So we want to solve this issue.
The problem with just using Cuvva Hourly for that purpose is that the continuous insurance enforcement (CIE) laws in the UK state that a car must always have an active underlying insurance policy whether you’re driving it or not. You can’t just be insured for the hours you drive.
How does it work?
You’ll pay a small monthly subscription which allows your car to sit comprehensively insured when parked. This means that the car cannot be driven, but you only pay a fraction of your typical annual policy premium.
When you want to drive the car, just buy a few hours of comprehensive Cuvva through the app. The pricing starts from £1.50/hour (although the price will vary depending on your age, driving experience, vehicle etc). This comprehensive Cuvva allows you to legally drive the car fully insured.
How does the monthly payment work?
To abide by certain insurance laws the monthly payment is every 28 days. This means in one calendar year there will be 13 different payments instead of 12. Providing customers with flexible monthly insurance wouldn’t be possible to do without doing it this way. We will explain in more detail in a later blog post about pricing.
Making sure you don’t drive uninsured
One of the biggest obstacles is how to ensure people don’t forget to buy comprehensive cover when they drive around. We’ve been thinking about different ways to solve this issue and we’re going to be testing a few different options which will involve either a beacon or an on-board diagnostic (OBD) device that plugs into your car.
The beacon is a device that you plug into the 12v socket in your car and syncs to your phone by bluetooth connection. The device will automatically sync with your phone and when you turn on your car to drive it will ping your phone with a notification to remind you to buy a driving policy if you haven’t already done so.
The ODB device pings your phone and also tracks miles driven. This would improve the pricing from our underwriters as they will have a higher level of certainty that the car is insured.
For the initial users we will be rolling out the beacon, however, we’re going to be getting feedback from our community and users to see which of the two options works best. Let us know which you prefer in the comments below.
Who will be able to buy it?
We’ve been working really hard with our underwriters to be able to offer the subscription to the biggest range of people possible and we’re really happy with who can initially purchase it!
The main requirements are:
– Driver aged between 21-75
– Vehicle value up to £75,000
– Vehicle max seats: 5
– Vehicle min insurance group: 1
– Vehicle max insurance group: 40
– Max vehicle age: 15 years old
This is just the initial underwriting model so over time this will broaden even further as we get more data for the underwriters. It’s kind of hard to price an insurance product that’s never been done before so we’re really happy with how the current model is looking.
When will it be ready?
We’re on to target roll out a closed Beta in mid March 2017, which we’ll be capping at 10 people, initially. This will be open to anyone who is eligible and willing to start using it right away.
I’m in. What do I need to do?
If you haven’t already, request an invite on our subscription car insurance page to make sure you’re on our list of early Beta users – we will be in touch!
When will you be rolling this out further?
We will start offering out more subscription policies over the following couple of months. Don’t worry, there will be loads more opportunities to buy a subscription policy along the way.