Customers of typical insurance companies pay a premium that’s generally determined by the average risk attached to the behavior of people they’ve never met. A new startup from the UK — Guevara — could now help responsible drivers to cut the cost of their car insurance through peer-to-peer group payments with people they trust.
Guevara customers have two options when they sign up for the service. They can create their own group of friends or trusted acquaintances, or they can let the company match them with other customers based on their claim histories. Either way, all members become part of a small group, and their premiums go towards covering only those drivers. If the group has money left over at the end of the year once all claims have been made, it goes directly to lowering every member’s premium. According to Guevara, after a few years safe drivers could cut their car insurance costs by 80 percent.
Groups can interact with each other via the Guevara app, using the message board to discuss claims and make joint decisions. Members can also vote to kick liabilities out of their group to preserve their low rates, and Guevara will find ejected parties a new group. Initial premiums are reportedly competitive with major insurers and the company already secured GBP 100,000 of custom in its first 24 hours after last week’s launch, according to Wired.
Guevara isn’t the only company aiming to revolutionize the insurance sector, with platforms such as FwdHealth using exercise tracking to help businesses bring down health insurance. Are there other ways to leverage new technologies to bring age-old institutions into the digital age?