Auto insurance start-up Clearcover aims to save millions for overcharged drivers

Auto insurance start-up Clearcover aims to save millions for overcharged drivers

Auto insurance start-up Clearcover aims to save millions for overcharged drivers

A shocking 20.8 million licensed drivers in California could be overpaying for their car insurance, according to a new data-driven auto insurance start-up Clearcover. 

The California-based insurer launched on Tuesday with the aim of “providing the right coverage [for Californians] in the moments that matter”. It’s AI-powered platform uses machine learning technology to provide customized auto insurance coverage recommendations to consumers.

“Drivers are overpaying because insurance companies waste money on things that you don’t need,” said Clearcover co-founder and CEO Kyle Nakatsuji. “It’s expensive to maintain outdated technology, buy celebrity endorsements, run commercials, and send an endless flow of junk mail. The costs of these things are added directly to your insurance rates. At Clearcover, we think you deserve a smarter option.”

Here’s what Nakatsuji had to say about insurtechs in the car insurance ecosystem

Clearcover uses a proprietary distribution platform that targets consumers in the “moments that matter,” such as when you’re buying a car, shopping for better rates, or researching ways to save money. This moment-centric distribution strategy allows the start-up to save money on marketing, and funnel the savings back into the auto insurance product in the form of lower rates, Nakatsuji explained.

“We’ve made it part of our company’s mission to help consumers pay less for insurance,” he added. “Very few companies can say that. And while no insurance company can promise the lowest price for everyone, we strive to offer low prices to as many people as possible by avoiding waste. So, instead of spending billions every year on TV commercials and celebrity sponsorships designed to buy your trust, we plan on earning it - with great customer service and reliably low prices.”

The data-driven auto insurance platform launched in California on Tuesday, February 13. Nakatsuji then hopes to “step on the gas in terms of state expansion in 2018.” For now, the platform is focused solely on auto insurance, but Clearcover might look to extend it to other lines of business in the future.  

“Our decision to focus on car insurance boiled down to two things,” Nakatsuji told Insurance Business. “Our model gives us great reach and works well with scale. We’re focused on working with distribution partners that will help us get auto insurance in people’s hands at a time when it really matters.

“Secondly, hundreds of millions of Americans need auto insurance every year – and almost all of them are overpaying for it. We don’t believe it’s fair to have around $200 billion worth of auto insurance premium being overpaid every year because insurers are tentative about innovating in a huge market like auto insurance. Clearcover is bringing a new approach to tackle this problem head-on.”


Related stories:
Agile insurtechs driving change in car insurance ecosystem
Esurance offers rideshare coverage in California




  • Jim Holm 2/15/2018 12:15:12 PM
    For some reason this new company has based its company on solving a problem that doesn't exist.

    There are those companies who spend lots of money on advertising, but most auto insurance companies spend less than 1% of written premium a year on marketing. Those companies that have lavish budgets --- are also those companies who have been highly successful. Warren Buffett and the people in Ohio with the lizard are not going to quack in the boots over this nonsense.

    Agents and copanies already know the pulse points of buyer's habits . . . and work those "moments that matter".

    This is just another insuretech that thinks they have the answers. Why don't these upstart companies hire people in the industry to help them avoid financial disaster?

    I would hope that potential investors in this start-up have a "moment that matters" . . . and then walk away.

    Post a reply
  • TG 2/15/2018 12:27:55 PM
    Seriously!? Buying celebrity endorsements and junk mail is not the reason combined ratios are well over 100%. If Clearcover was publicly traded I would buy the put now, this will be fun to watch.
    Post a reply
  • RGA 2/15/2018 1:23:10 PM
    I have said for years there was a lot of stupid money being spent, and this is yet another example. Marketing is not driving costs - losses are. Go price a car part and then pay the labor to install and calibrate the related sensors. It's obvious they don't read industry news. Just today the NICB reports "Rising Cost of Parts Fuels Interest of Car Thieves". But hey, let's focus on reducing marketing costs.
    Post a reply