Selling Auto Insurance to Ridesharing Drivers

December 3, 2015

Selling Auto Insurance to Ridesharing DriversInsurance coverage can be a touchy subject for ridesharing drivers. Some drivers aren’t aware of the risk of not carrying the right insurance, others are uneducated or misinformed. However, the market for these auto insurance leads is growing every day, right along with the demand for ridesharing services. If you want to target ridesharing drivers with your auto insurance business, here’s what you should know.

Lacking Rideshare Coverage Puts Your Client at Risk

First, a show of hands if you’re an auto insurance brokers who’s had this experience:  

Your client has a small fender-bender. It’s minor, but he probably needs a new bumper that’s going to set his insurer back a grand. He calls to file a claim and, in the midst of describing the accident, mentions he was driving for a popular rideshare service. Suddenly, he’s persona non grata. That new bumper is coming out of his pocket, not the insurer’s.

Chances are, if you haven’t already had a client in this type of situation, you will soon. Uber has over 165,000 “active” drivers in the US. Forty thousand are signing up per month, though not all stick with it. Meanwhile, Lyft is on track to provide 13 million rides per month by the beginning of 2016.

Here’s the upshot: your insurance sales business has a great opportunity to provide the coverage these drivers need — both for their personal and professional car use. The trick to capturing this opportunity is two part:

  • Educate your current clients about the need for specific coverage for their rideshare activities and
  • Make sure to quiz new auto insurance leads about whether they plan to use their car for ridesharing purposes.

Starting the Conversation

One downside of the current rideshare insurance situation is that leads may be reluctant to talk about their ridesharing activities with you because they fear it could hurt them. Some are worried a discussion with their current insurer could lose them their existing coverage deal. Others are worried about higher premiums — perhaps higher than someone making a bit of side money with their car and the Uber app could afford.

Your approach with auto insurance leads will have to answer these objections. Frame your ridesharing activities questions with just enough info about basic coverage options and costs to alleviate these fears. When you get a prospect that does want to hear more about ridesharing coverage options, then you can get into the details.

Answering Concerns Rideshare Drivers May Have

Once you have a prospect that wants to hear about ridesharing coverage, the sales conversation moves into familiar territory. Listen, probe, educate. Match the prospect’s needs to a suitable coverage option. What’s different though, may be some of the topics you cover.

Cancellation – Some larger insurance providers are quick to cancel a policy if they learn a customer is driving for Uber or Lyft. Others have specific stipulations that they won’t cancel a personal policy because of ridesharing. That’s not to say they’ll cover rideshare vehicle use, only that it won’t jeopardize existing personal use coverage.

Coverage Gaps – You’ll want to make your clients aware of any coverage gaps between policies. For instance, many standard insurance providers won’t cover a loss if the ridesharing app is active, regardless of whether your client has a fare passenger or if the car is in motion. This could leave some drivers without coverage while waiting for their next fare.

Mileage – Some insurers may have specific restrictions on coverage for miles driven while the app is on. For some rideshare-specific insurers, per-mile coverage may be an option. These drivers pay an adjustable rate based on their ridesharing miles.

Rate Locks – A few insurers will offer rate locks for ridesharing drivers, meaning premiums won’t increase because of claims or traffic tickets.

Personal / Business Use – Some insurers classify a car used for ridesharing purposes as a personal use vehicle, for others it’s a business use vehicle. Some customers may prefer the personal-use classification — it tends to cost less.

Multi-Car Use – Some insurers have specific policies about multiple vehicles. Some require all vehicles on the policy to share the same level of coverage. Others require multiple vehicles such that one car is designated for ridesharing use while the others will be for personal use only.

Whole Household Coverage – Some insurers only provide limited rideshare coverage, others offer full-fledged policies to accommodate entire households.

Knowing Your Rideshare Demographics

Not every auto insurance lead will want to hear about ridesharing coverage. Some may not even know what ridesharing is. While it’s certainly possible you’ll encounter a septuagenarian Uber driver in your lead prospecting, it’s much more likely you’ll encounter ridesharers among younger, urban, tech-savvy demographics.

First off, know what markets these apps operate in. Both Lyft and Uber maintain updated lists of the U.S. cities where their services are offered. If you are prospecting in these metros, be aware your clientele may be driving for the services.  

As far as personal demographics go, a recent piece in Forbes found Uber drivers were overwhelming more likely to be 18–39 year old white males with a college education and kids at home than traditional taxi and chauffeur drivers were. To be clear, women do make up nearly 14% of Uber drivers, a higher percentage than for taxi drivers, and there are just shy of 3% of Uber drivers out there past retirement age, but these folks appear to be outnumbered by other demographics when it comes to rideshare driving.

Selling Your Solution to Drivers

With the expanding ridesharing driver market and the popularity of these services, ridesharing insurance coverage offers a great opportunity for your business. Be aware of overlaps between your customer base and that of popular services, educate and inform your leads of ridesharing insurance requirements and options, and know what objections these particular prospects may have.

If you’re looking to target this market or another in the auto insurance market, you’ll first need a healthy supply of leads. If your pipeline is lacking, consider giving it a boost with high-quality aged auto insurance leads from the Aged Lead Store. With some new aged leads in hand, you’ll be ready to start prospecting for those ridesharing drivers.

About Troy Wilson