Insurance options for auto rentals
When Roam and Onlia formed a partnership, their goal was to introduce more personalized insurance choices to the car rental economy, particularly in the subscription service model.
Fernand Vartanian, co-founder and General Counsel of Onlia, stated that the main concern with subscription services is the uniform insurance cost that doesn’t consider individual driving behavior or records. Their aim is to integrate insurance into the point of sale, providing not just access to a car, but also personalized insurance rates.
Vartanian, along with Roam’s founder Apoorv Gupta and General Manager Duncan McCall, discussed this trend during an interview with Insurance Business. They also explored the advantages of using an Application Programming Interface (API).
Evolving Consumer Demand Given the current auto market, the burden of owning a car is gradually diminishing. Gupta explained that vehicles are only used around 5% of their lifespan, leading to excessive costs for ownership and insurance during periods of non-use.
Vartanian observed that people are increasingly looking for flexibility in spending and freedom from long-term car commitments. Traditional yearly insurance models and early cancellation fees might become outdated.
Catering to a Diverse Customer Base Roam’s vehicle rental service caters to immigrants and expats who require transportation for work and other commitments. McCall noted that having a vehicle is vital in many parts of Canada, and newcomers often face difficulties due to credit and banking history issues.
With an embedded insurance offering, rental agreements encompass the value of insurance, making it convenient for users to acquire a rental vehicle while having insurance coverage.
Benefiting from API Integration Application Programming Interface (API) acts as a bridge for data transfers between systems, enabling collaboration and innovation between different entities.
Onlia had already developed an API, facilitating the seamless partnership with Roam. This allowed them to access Roam’s pricing engine and provide quotes to customers, streamlining the process of binding insurance.
Embedded insurance products like this have the potential to revolutionize the automobile industry, particularly for vehicle buyers.
Vartanian envisions a scenario where insurance is already in place when finalizing a car purchase, simplifying the process and eliminating the headache of finding insurance later.