Economical Insurance has entered a new partnership with Turo, the world’s largest peer-to-peer car sharing marketplace, through which it will provide commercial auto coverage for Turo’s host and guest community in Ontario, Québec, Alberta, and Nova Scotia.
Since launching in 2016, more than 1.2 million Canadians have signed up for Turo, and more than 53,000 cars have been listed on the platform in more than 350 cities in Canada. Through this new partnership, hosts and guests of Turo are provided with up to $2,000,000 in commercial auto liability insurance issued by Economical. The policy is underpinned by the technical underwriting and claims expertise that Economical has developed and continues to foster in the sharing economy space.
The vehicle owner, or Turo host’s personal auto policy, will be in effect when they’re using their vehicle for personal use, but as soon as their vehicle is rented out via the Turo platform, Economical’s commercial auto policy will kick in. It also covers the host while they’re delivering the vehicle to the guest for the rental period – filling a potential coverage gap or grey area in most personal auto policies.
Economical’s entry into the peer-to-peer car sharing marketplace expands on its already significant footprint in the Canadian sharing economy and gig economy. The insurer started building its sharing economy practice a few years ago, and, in September 2020, it won a significant deal to become the official commercial auto insurer for Uber, covering Uber Rides and Uber Eats trips in Ontario, Québec, Alberta, and Nova Scotia.
“We’re already in the ride sharing space, we’re in the delivery of goods space, so, in some ways, this partnership with Turo is a natural extension of our footprint within the sharing economy space, by participating in peer-to-peer car sharing,” said Obaid Rahman (pictured), VP of commercial underwriting and specialty lines at Economical Insurance. “We believe we are digital leaders within the insurance marketplace in Canada. Getting into car sharing, in addition to ride sharing, gives us an opportunity to build new solutions, which are very much data-based and technology-driven, and it gives us learnings for the next evolution that’s going to happen in mobility.”
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When providing insurance for a mobility platform like Turo, Rahman said underwriters are very focused on the risk management mechanisms that the platform has in place to protects hosts and guests, to ensure the safety of the vehicles, and to prevent any fraudulent activity or crime.
“That’s probably the biggest part of these platforms that we have to underwrite before we decide to participate,” he told Insurance Business. “We look at the safety mechanisms that they have in place – and safety is broad: it goes all the way from the safety of the car to ensuring the safety of who’s renting the car and what they’re using it for.
“The second piece is that platforms [like Turo] collect an enormous amount of data because they’re fully automated and the entire experience is digital, and we have to take that data and translate it into insights that help us to underwrite and price these risks effectively. That’s a challenge, but once you have the expertise to deal with that, you can produce the right solutions that work for these organizations.”
Rahman said Economical is able to meet the changing needs of clients in the sharing economy and the mobility marketplace because of its continued investment in talent, technology, and digital leadership.
“We know mobility is evolving – and the sharing economy and the gig economy are just two components of that evolution,” he said. “We’re studying other models and we’re looking at other solutions on different aspects of this evolution […] so that we can develop products that meet our customers’ needs as this evolution happens.
“We’re extremely proud of this partnership with Turo [and that they’ve] trusted us to give them the solution and the product to help them grow, build out their business model, and get to the next stage in their strategy. Moving forward, we’ll look at not only expanding our footprint in the car sharing space, but also having a leadership position within the sharing economy in the Canadian marketplace. The key point for us is that we continue to expand on [our practice], we continue to innovate, and we build solutions that work for customers as this mobility industry is evolving.”
