Micro insurance on an app? It could save you money!

Micro insurance could soon be using GPS to follow your every move and change your cover minute-by-minute.

micro insurance | over 50's finance‘On demand’ micro insurance will be provided by a new app, the company behind it says that essentially firms will be able to “micro-insure” a customer depending on where they are or what they are doing at any particular moment. The system would mean that a company could automatically change the type of insurance a customer has depending on what they need at a particular moment, meaning you won’t be paying for a certain type of insurance that you don’t need at that exact point in time. The idea is similar to some car insurance plans which offer users discounts if they allow insurers to record when, where and how they are driving (black box). Currently, the app Trov offers short-term insurance for electronics, such as cameras and mobile phones. Users can turn insurance on and off for each item individually using the app. They can also use it to make a claim. The company is partnered with Axa to underwrite policies, which they say will tackle the problem of younger people with no insurance. While policies will be slightly more expensive on an equivalent basis than others on the market, the company says that the ability to switch off the cover when it’s not needed will make up for this. At the moment, it primarily insures small electronic items like laptops, mobile phones and cameras.

Chief executive of Trov, Scott Walchek, said that it would tackle fraud by examining consumer behaviour and looking for patterns suggesting fraudulent claims, such as claims being made quickly after a user signs up. “Single item protection is just the beginning of what’s possible with a platform that can power micro­duration insurance, the system could eventually be automated, removing the need for the user to turn the cover on at all” he suggested.

The policy would cover them for all eventualities and all types of insurance, removing the need to pay for cover when not completely necessary. An example, if a cyclist is at home, their bike would be covered under their home insurance policy. A GPS tracker in their phone would know when they had left the house and automatically switch their insurance on. When travelling, they would need liability insurance – which protects them against legal claims if they are alleged to have injured someone else. And when they reach their destination, locked and left the bicycle, they would only need cover for theft or accidental damage. All of these phases of the micro insurance app would be switched on automatically as the system would know where the user is and how fast they are travelling, as well as the locations of their home and work addresses.

Privacy experts say that people should be aware when an app is tracking their location – and watch out for unsolicited marketing. A spokesman for the app said that it “only collects the data it needs,” and added: “When signing up, the user is provided with the opportunity to opt out of receiving marketing communication. “This opportunity to opt out was implemented for the UK launch in order to adhere to EU privacy law.”

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