Will on-demand car insurance save the industry?

Cheap car insurance is thin on the ground in the UK, but the brainchild of a Scottish businessman could turn the industry on its ear – if it works.

The idea, according to Freddy Macnamara, is to book car insurance on an as-needed basis. We’re talking by the hour, on-demand, according to a profile of the bloke that appeared in The Scotsman recently. Freddy grew up in a region of the Highlands where there was hardly any public transport, effectively stranding him, and that it was just too prohibitive to keep a car thanks to the almost-criminal car insurance rates these insurers were charging him. Then one day he had had quite enough; his sister broke his arm, and he couldn’t even take her to hospital because he would have had to have borrowed his father’s car.

This inspired the 27 year old Freddy to found his own car insurance company, existing exclusively online, that provides comprehensive cover for its customers on an hourly basis. It’s likely the first of its kind. The service, known as “Cuvva,” has been coinedthe Uber of cheap car insurance, thanks to the ease of use and its Uber-like mobile app.

So how much is it going to cost you? Well around 7 quid for the first hour. However it’s proportional – longer bookings are cheaper in the long run, as app users get discounted rates for booking several hours at a time. The service is brand new, so the jury is still out on how popular it’s going to be, but if those prices are any indication suddenly it might be a lot less expensive to borrow Mum or Dad’s car for to go run some errands for an hour, commute to work and only pay for the drive there and then the drive home, or use a vehicle legally in an emergency – for instance, if your sister breaks her arm and needs a lift to hospital.

Honestly I think it’s brilliant. This sort of micro-transaction approach is obviously not going to be appropriate for everyone, but it certainly seems poised to have a democratising effect on access to personal transport. Most cars just sit around for hours on end, not being driven, and it will certainly benefit those of us who always get some rough treatment from car insurance companies when it comes to insurance rates – those under-24s who get the short end of the stick come to mind. Likewise anyone living in the regions where there are little to no transport link options to be had. So there, I’m all for it! I hope it’s wildly successful.

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