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 “It’s expensive to maintain outdated technology, buy celebrity endorsements, run commercials, and send an endless flow of junk mail.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.”
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