Spot Check: Startup Charts Path To On-Demand, Digital Injury Insurance

Healthcare is top of mind, and not just because of the pandemic.

The daily headlines centered on emergency rooms, the spiking costs of health insurance (and the changing healthcare landscape), has spurred everyone to think more than they have about health insurance.

Matt Randall, CEO at InsurTech startup Spot, told PYMNTS that affordable accidental injury coverage via an on-demand or subscription model, can help insulate active consumers like athletes from the shock of unforeseen medical bills. With a nod toward comprehensive healthcare, he said: “If you can afford it and you have it, we think that’s great. We don’t look at ourselves as necessarily replacing it.”

But there are gaps in the healthcare system — vulnerabilities that can upend individuals’ and families’ lives. The stakes are high. Among the top reasons people file for bankruptcy, said Randall: unforeseen medical bills. One of the main reasons for the mounting medical debt lies with high deductible plans, in which a family of three might pay $1,300 a month and have a $14,000 deductible in place, for example.

“Most people can’t afford a $14,000 bill by any stretch,” said Randall.

And in a high-cost medical environment, he said, consumers all fearful of accidents — the broken bones, lacerations or bumps and car accidents that send us to the emergency room.

Spot, he said, seeks to build an ancillary, digital-first offering that works alongside traditional health insurance.

“When we hear the word ‘insurance,’ we traditionally have a button in our brain that says turn off because insurance is traditionally very boring,” he said. But “digital obviously is taking over every industry — insurance and law firms … are the last ones to adopt it.”

But a fully digital experience, via on-demand and subscription conduits, can make insurance both accessible and affordable, he said.

In terms of mechanics, Spot subscribers pay $25 a month to get coverage up to $20,000 every time they have an accident (whether they have health insurance or not). If a subscriber sustains an injury, they go to a provider for diagnostics or treatment (treatments not recommended or ordered by licensed physicians are not covered). Thus, roller derbies fall under the coverage umbrella, Spot has said — and so does swimming with sharks.

Subscribers then file a claim online, which Randall said can be done in a manner of minutes and across mobile devices. Claims teams coordinate payments via check to customers or to their provider (Spot, he said, does not underwrite risk; that’s borne by the carriers with which the firm partners, such as Mutual of Omaha). Claims typically are paid out within a few business days.

Spot operates across 43 states in the U.S. Randall said that 55 percent of the company’s users have health insurance in place; the remainder use Spot as their primary care. The average customer is around 35, skews male and is typically active, he said.

“Whenever they get sick or injured, they just want to be covered,” he said.

Turning It On And Turning It Off

He noted, too, that there is a “turn it on and turn it off” offering, where in Netflix-like fashion, customers can opt to have coverage depending on the situation. In one example, he said that the company is working with ski resorts where an individual buying a lift ticket can opt for an extra charge of a few dollars to be covered while they are on the slopes. The company also struck a partnership with USA Cycling in which members of that organization can get coverage for medical bills if they are injured while cycling for $40 annually.

“You could be a dad teaching your kids how to ride a bicycle, you can be racing, you can be commuting back and forth to work,” he said.

The company has received $8 million in funding from Mutual of Omaha, Silverton Partners and MS&AD Ventures — and the funding from the carriers represents interest in different ways to reach younger demographics (in the spirit of collaboration rather than competition), he said, where Spot’s demographics are “the pinnacle, in the insurance world, of who they want.”

Looking ahead, he said that Spot will be looking toward other types of coverage, while educating the market at large that there are options beyond simply paying that aforementioned $1,300 monthly premium and $14,000 deductible.

“The goal here is we want to be the very first lifestyle company in the insurance space,” Randall told PYMNTS. “We want to create an aspirational, inspirational company that encourages people to get out and live life.”