UK: Insurance product technology and standards provider, Polaris, has announced that it has agreed a ‘market-first’ set of new standards specifically for the increased demand for short-term insurances.
This launch has been attributed to the dialogue it has been having with sharing economy insurance specialist Pikl, who published a 2019 report focused on short-term sharing.
The report highlighted that insurance companies, brokers and price comparison websites were not determining, in their traditional customer journeys, whether customers are short-term letting before providing cover. Without collecting this information, customers are at risk of unintentionally taking out cover that may be inappropriate for them or could be voided by their sharing activity.
Pikl’s report highlighted the lack of knowledge that existed amongst insurance providers, brokers and consumers about the specific insurance requirements of those participating in the sharing economy.
Polaris has produced the updated standards to cater for those individuals who use either their residence or vehicle for short-term commercial purposes. The standards were agreed by the Polaris Electronic Trading Practices Group [ETPG] which is attended by representatives from many of the UK’s major insurers and brokers involved in underwriting and product development.
The personal lines property standard currently includes provision for a property that is let out permanently, but not where a room or the entire property is made available for short-term lets [such as AirBnB and HomeAway]. The private motor standard similarly allows for ongoing business use, but not for occasional commercial activity such as delivering parcels or take-away food.
Vivek Banga, managing director of Polaris, said: “HMRC estimates over one million properties in the UK are being used for short-term property sharing. It’s therefore essential that insurers can identify which of their policyholders are looking to take advantage of such opportunities to ensure the cover being offered meets their demands and needs.
“The updates to the standards will enable insurers and brokers implementing these changes to be able to identify these risks and take informed decisions on how they underwrite them. We are very pleased that Polaris has been able to create this market-first product standard in the UK by bringing the right parties to the table to enable this market-wide agreement on a standard,” added Banga.
Louise Birritteri, CEO and founder of Pikl, said: “I am delighted that Polaris has responded to the findings of our industry report and invited us to participate in the Polaris ETPG working group to developed standards for use by the insurance industry to cater for those participating in the vibrant sharing economy.
“We have had some really positive dialogue with the insurance industry and we are really pleased to have got this industry-wide agreement to a standard. This represents a big step forward in the insurance market beginning to ensure customers’ demands and needs can be assessed and they are treated fairly when sharing.
“Our report revealed that the majority of people participating in short-term letting were at financial risk because they do not have appropriate insurance and instead are relying on their standard home insurance policy, which is voided by the majority of insurers in the UK when short-term letting.
“The introduction of a new question in the quote process to identify those customers who are short-term letting will enable them to be directed to the right insurance coverage for their needs,” she added.
Pikl’s products have been designed to run alongside customers’ standard home insurance policies giving them peace of mind, great value and appropriate protection when short-term letting.