Brokers are once again being called upon to adapt to such “sharing economy” services as Airbnb and Uber.
The Ontario Chamber of Commerce, an independent business network consisting of 60,000 member organizations, published a report called Harnessing the Power of the Sharing Economy, setting out its recommended guidelines for capitalizing upon the prospering modern sharing economy.
One of the main provisions calls upon insurers to adjust to this reality by developing offerings that protect users of such services as Uber, Autoshare and Airbnb.
“Traditional insurance products have not adapted to account for occasional commercial use (throughout the sharing economy) and the need for products that provide this coverage,” states the report.
While many auto insurance providers have been vocal in their reluctance to tailor products to an unregulated business model, some home insurance entities have taken the opposite approach and embraced this market as a new opportunity to sell coverage.
“I absolutely, totally, positive agree that we need to adapt,” said Daniel Mirkovic, president and CEO, Square One Insurance. “We changed our approach to home insuring programs over two years ago, and we offer personal homeowners’ policies to people who are participating in Airbnb and other home insuring programs.”
Mirkovic’s team stands out as one of the few, if not only, providers that carry this protection as personal policies as opposed to commercial coverage, which has been widely embraced by consumers.
“The downside of going commercial is that premiums are usually higher,” he said. By comparison, under personal coverage, clients can obtain a comprehensive homeowner policy for about $10 extra per month with a $2,500 deductible for a rental suite, or $5,000 deductible if the primary residence is used exclusively for short-term rentals.
Mirkovic hopes that other providers will follow suit in providing innovative coverage that protects as many clients as possible, even those who need non-traditional policies.
“Our perspective is that whenever the answer to a question is ‘That’s the way it’s always been done,’ instead, use that as an opportunity to do something different and better that meets the needs of customers today,” he said.
