InsurTech Futures: Cuvva launches new car insurance product

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Product aimed at infrequent drivers.

Start-up pay-as-you-go car insurance broker Cuvva is set to launch a new category of insurance aimed at car owners who use their cars infrequently.

The challenger broker said that this new way of buying insurance will "revolutionise the sector" and could save customers up to 70% of the cost of an annual premium.

It added that according to Department for Transport and Driver and Vehicle Licensing Agency figures, there are around six million cars in the UK that are driven very infrequently.

Subscription
Cuvva detailed that it will allow car owners to buy insurance in a new way by paying a monthly subscription of between £10 and £30, depending on the car and where they live. This is to insure the car when it is parked.

Drivers will then use an app to pay a top-up premium from £1.20 an hour when they want to drive the car.

In addition, drivers who use the monthly subscription product will earn a no claims discount each year.

Cuvva, established in February 2014, stated that the product is aimed largely at car owners who live in cities and rely on public transport for their journey to work, meaning that their car is driven for fewer than 4,000 miles a year.

Technology
Freddy Macnamara, founder of Cuvva, said: "Technology has changed so many industries and given consumers cheaper, more convenient alternatives.

"Yet car insurance continues to be opaque and inflexible, costing some people a lot more than it should."

He continued: "Whether it is borrowing a car from a friend for a short period of time, or owning a car that you don't drive much, many people get an unfair deal when it comes to car insurance."

Trend
Ophelia Brown, general partner at venture capital investor LocalGlobe, said: "Pay-as-you-go insurance is a long overdue product in the UK, where increasingly the trend is for drivers to use their cars less and less.

"It's crazy that people's premiums haven't and can't change to reflect that. Cuvva understands that, just as consumers expect price transparency and flexibility with all other financial services, they should also get that with their insurance."

The insurtech firm claimed to be the first tech platform to offer cover through a mobile app to drivers who want to borrow a friend or relative's car for a few hours or share driving, when it launched in October 2015.

According to Cuvva it has now sold over 130,000 hours of car insurance through its Cuvva Sharing product to drivers who want to borrow a car for as little as an hour.

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