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April 11, 2022 Tech 25

2022 Tech 25: Insurtech Stable Insurance launching ‘gap-free’ coverage for rideshare drivers

CONTRIBUTED PHOTO | LYFT Stable Insurance is developing a more complete insurance coverage option for rideshare drivers.

As the calendar turned to 2020, rideshare companies were so busy they couldn’t hire drivers fast enough.

A few months later, workers displaced by the pandemic were looking for some quick cash and were eager to drive, but much of the public was staying home.

That’s when food delivery became a hot business.

Douglas Ver Mulm

The fundamental feature of these gig jobs was an individual driving a personal car “for hire,” a use not covered by normal auto insurance. Coverage riders were available — often for a hefty price. And gray areas were frequently an issue.

Platforms like Lyft, Uber and DoorDash covered the driver while on a call, but coverage wasn’t always as clear on the way to or from a fare, or when “prospecting” for fares. And drivers couldn’t afford to have their cars out of service while they negotiated with an insurer.

For insurtech entrepreneurs like Douglas Ver Mulm and his partners Stephen Decker and John Salvucci, that seems like an opportunity for a fit-for-purpose insurance coverage provider.

They’d been working on the edges of the rideshare industry, looking for an opening in fleet coverage. They shifted gears and within a few weeks — likely by early June — Stable Insurance expects to start offering coverage to gig drivers in Illinois.

Fit-for-purpose insurance is a complex regulatory area, Ver Mulm explains, and Stable has to advance state by state. It expects to add Arizona and Texas later this year and a dozen states in 2023.

The idea is to offer gap-free coverage with underwriting based on a gig driver’s record gathered from mobility platform apps and dashcam data. Using that subset of driving data bypasses rating factors like age and credit stability that can drive up the cost of insurance from mainstream providers, he says.

Gig drivers often rack up 30,000 miles in six months, he explains, and that’s enough of a record to provide a good basis for underwriting.

Ver Mulm calculates that across the nation there are “1 million drivers up for grabs,” including up to 70,000 in Illinois.

In late February, Stable received $3.3 million in capital from investors led by Brooklyn Bridge Ventures and MLTPY, which is helping with software, insurance and reinsurance carriers.

The product line includes fit-for-purpose coverage for rideshare, delivery and carshare use. Downstream, Ver Mulm sees Stable being able to leverage its rating data into offering a wider range of coverage and products. And he sees vast potential in insuring rideshare vehicle fleets outside the U.S.

Ver Mulm, an attorney by training, is an unlikely innovator in auto insurance.

For 15 years, he lived in Brooklyn and seldom drove. He quit his job in 2019, moved to West Hartford and dove into the Hartford InsurTech Hub to pursue the fleet insurance idea.

Then COVID-19 hit and he saw the potential for insuring gig drivers. He got a driving job to research the issues and witnessed the rapid changes in the field.

And that was enough to validate the business concept.

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