Technology Enables Customized Auto Insurance for Gig Economy Drivers

Gig economy drivers can face some complications when it comes to their auto insurance.

First, when they turn on an app and start using their vehicle to generate revenue, their personal auto policy no longer provides coverage — they need a commercial policy.

Beyond that, the coverage can depend on whether there’s a passenger in the car, whether they’re waiting to accept a fare and whether they’re on their way to pick up a fare.

“There’s all these rules and coverages and lack of coverages,” Dustin Walsey, co-founder and president of Buckle, told PYMNTS.

Ensuring Coverage Will Get the Car Back on the Road

To simplify things for those who serve the shared economy, Buckle provides rideshare and delivery drivers with personal and commercial coverage in a single auto insurance policy.

“They buy a Buckle policy, and this becomes the simple, one-stop, ‘I come to Buckle for everything — for all my payments, for all my claims, for anything that may happen,’” Walsey said.

Another problem for gig economy drivers is that when their car is in the shop after an accident, they can’t drive for the rideshare or delivery company. As such, they need a policy with a deductible that they will be able to afford, so they can get the car back on the road.

Getting More Granular Data With Telematics

In addition to providing coverage designed for these drivers, Buckle has added a new option: a mobile app that measures both the insured’s driving quality and the time they spend on gig economy driving versus personal driving. This data helps drivers improve their behavior and helps Buckle deliver a customized price.

The app builds a driving score based on harsh acceleration, braking or swerving, speeding and phone use. Buckle uses this data alongside other granular details, such as driving at night versus day and carrying passengers versus packages.

“We’re using all these different data sets — and telematics enriches our data — so that we can get more refined pricing to pass that savings along to these drivers,” Walsey said.

See also: Telematics Enables Insurers to Monitor Driving Behavior, Promote Safety

Using Digital Onboarding and Payments

To make it easier for drivers to sign up for a policy — with or without the telematics option — Buckle offers a very digital onboarding experience.

While it must ask the questions any insurance company would ask, such as name, address and VIN number, the company uses data sets to make pre-fills wherever possible. It’s primarily done through the company’s app because drivers often get quotes while waiting for rides.

“No one is like, ‘I’m excited to go buy auto insurance,’ so at least we tried to make that onboarding experience as clean and easy as possible,” Walsey said.

For down payments and monthly payments, Buckle accepts the digital payments that its payment processors allow. Gig economy drivers tend to have bank accounts because that’s how the rideshare and delivery companies pay them, so they have debit or credit cards.

“I think we get lucky in our customer bases — they all have to have some sort of account where their earnings get paid to them,” Walsey said. “It’s a pretty clean process.”

Related: Visa: Real Time Payments An ‘Expectation’ Among Canada’s Gig Workers

Making Innovations in a Challenging Business

When paying claims, Buckle tends to use either checks or automated clearing house (ACH) transfers. Insurance carriers, body shops and individuals have their own preferences and the industry as a whole is slow moving, in part because it is regulated at the state level — so there are 50 different entities to deal with.

“That’s why you see some of the slower innovation on some of those payment processes,” Walsey said. “I mean, someday, I’d love to be able to take Venmo, Zelle and all those — and it is definitely in the roadmap — but the insurance business is a very challenging business from the technology standpoint, just because it’s this big behemoth of an industry.”

For gig economy drivers who are looking to insure their vehicles, Walsey suggests they always be very clear with their insurance companies about what they’re doing. If they are doing something that is not covered by their current policy, they may learn the hard way that something they thought was covered is not.

“No one’s happy when the coverage isn’t right, and it all stems from transparency,” Walsey said. “We’re very transparent with what we try to do and how we try to do it, and people should be as well — it’s just for their best interest to protect their car.”