Startups want to change what you insure and how you insure it

In an insurer’s ideal world, there’d be a profitable policy for every conceivable risk. Click once, and you’re covered.

In the real world, however, insurance coverage hasn’t kept up with the social and economic changes of recent years. Sharing economies have gained scale. Jobs have gone from full-time to gig-based. And the vast millennial generation has entered adulthood intent on completing any complex transaction in a couple of minutes online.

Insurance policies, in contrast, look the same as they always have.

But if it seems like old-school terms and sales methods no longer fit, give it some time. If there’s a way to make money selling coverage, assume insurers are working on it. If not a big insurer, then probably a startup.

“Insurance is such a big sector that even niche categories have the potential for building large businesses,” says Caribou Honig, a founding partner at QED Investors, a VC firm with a number of insurance investments. Startups are also competing with incumbents by building better interfaces to sell policies via smartphones.

So far this year, insurance-focused startups have raised more than $700 million in venture funding, according to Crunchbase data, with significant backing from both traditional VCs and large insurers. The lion’s share of investment has gone to companies pioneering and popularizing coverage categories and delivery models, with a particular focus on millennial customers.

Here are some of the areas new insurers are targeting (outside of healthcare, deemed too massive and politically in flux to address here).

Theoretically, people might like the idea of insuring personal belongings or big life events like weddings and world travel. In practice, however, few of us have time and inclination to shop for policies.

An emerging breed of on-demand insuring apps, however, are betting that more people will choose to buy coverage if doing so is fast, easy and affordable. Several are also folding in options to snap pictures of possessions to be insured, with quick quotes to follow.

One of the most richly funded players in this space is Trōv, which has an app for quickly insuring personal and work items like laptops, smartphones and high-end cameras. The five-year-old company raised a $45 million Series D round in April led by reinsurer Munich Re, bringing total funding to nearly $90 million. The company has been operating in Australia and the U.K., including a recent launch in the U.S.

Cover, which just closed an $8 million Series A, offers a similar service. Customers take a picture of the item they want to insure and Cover offers a policy, underwritten by a partner insurance firm. Another player, New York-based Sure, has focused on on-demand coverage for events. The company raised an $8 million Series A round in January to build out its mobile app offering quick insurance quotes for things like weddings, baggage, flight cancellations and pet health. (Like Cover, Sure doesn’t actually underwrite the policies it sells. That’s done by big insurers like Nationwide, Chubb and MetLife.)

Standard auto insurance policies aren’t always the best fit for people who drive very little or who borrow a car for a short time. Startups are attempting to deliver to these and other use cases.

One of the most richly funded insurance startups over the past few years is Metromile, which insures based on how much customers drive.