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Insurtech startup closes £1.5m seed round and launches subscription-based car insurance

Pay as you drive insurance startup, Cuvva, has announced it is launching a new subscription insurance product which it says will benefit infrequent drivers.

The new product will allow car owners to pay a monthly subscription fee of between £10 and £30 a month, dependent on where they live and their type of car, and will then pay a premium top up from £1.20 via an app whenever they drive their car.

Drivers will still be able to rack up no claims bonuses from the policies in a move which London-based Cuvva claims will help to radically cut the cost of insurance for people with shorter driving histories.

Following the launch of the new product, Cuvva Founder, Freddy Macnamara, said that the inspiration for the idea about when he wanted to lend a car to a friend.

He commented: It was ridiculous that I couldn’t borrow a car for an hour, because of the difficulty of getting short-term cover. I could order an Uber or a Deliveroo to my house, but I couldn’t buy insurance for a short period quickly.

“We realised that we could use the same mechanism to save infrequent drivers a huge amount of money. Saving £500 to £1,000 a year on your car insurance is life-changing. Everyone can think of someone who will benefit from that.”

The launch coincides with the closure of a £1.5m seed funding round led by LocalGlobe, bringing total funding for the startup to £2m.

Ophelia Brown, General Partner at venture capital firm, said: “Pay-as-you-go insurance is a long overdue product in the UK, where increasingly the trend is for drivers to use their cars less and less.

“It’s crazy that people’s premiums haven’t and can’t change to reflect that. Cuvva understands that, just as consumers expect price transparency and flexibility with all other financial services, they should also get that with their insurance.”

Interested drivers can sign up now for the service ahead of its official launch this April.

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