Car insurance apps are InsurTech tools aimed at helping customers select the right insurance policies and feel safe and secure while driving. As you will see, it is a good industry to develop your application as the market grows actively. It is predicted that it will double by 2025 from approximately $5 to $10 billion in revenue!
You can read about the car insurance app development in the guide, but before that, let’s see why they are useful and how they work.
Law compliance and privacy
First of all, insurance apps are connected with various laws, and you should be sure you know them all. There are many of them in the U.S. alone, including mandatory providing customers with specific information regarding insurance details, securing their data, and financial regulations. Check all privacy laws in regions where your app will be downloaded and establish clear communication with customers regarding data privacy.
You must become familiar with all of these laws in the countries where you plan to issue your car insurance app.
What typical car insurance apps must do? Insurance is based on selling the right policy, saving a customer from unpredictable dangers. In case of trouble, they will fill a claim to obtain compensation. Mobile applications enable users to do this online very quickly and efficiently. Its features will be described soon, but you can see them shortly on the diagram below.
Therefore, they should provide a wide range of policies and help customers choose the right one. They can also provide additional features, facilitating the driving process and ensuring its safety. Examples are providing incident information, driving tips, and maps with car repair shops and incident probabilities. As you’ll see, it is not a limit.
Types and examples
You can build a car insurance app with various functionality, but several types of them can be specified.
- Insurance company app. These are apps built by insurance companies and providing their services.
Example: Geico, a well-known insurance company founded in 1936, and actively using its mobile application for providing insurance proposals and tips.
- Insurance startup with innovative features. By integrating modern technologies, insurance startups may become new-generation companies.
Example: Lemonade, an insurance startup, launched in 2015 and uses AI and machine learning as its distinctive competitive advantage to provide low-price efficient policies.
- Insurance plans comparing apps. They analyze your customer’s car parameters, desires, and capacities and show which insurance companies will fit them best.
Example: PolicyBazaar, which operates in India and enables its customers to compare the best insurance policies from various providers.
- Risk-reducing insurance apps that analyze the driving manner of the driver and propose policies based on them. They can measure a specific telematic score based on how risky the driver’s behavior is and, thus, measure the probability of engaging in an accident. Also, they can show driving tips and provide a map of dangerous places where accident risks increase.
Example: Root monitors the driving data of its customers via smartphone sensors and provides insurance based on them.
Some of these apps include features that others do not have. For example, Root analyzes driving manners, which allows it to be classified as a risk-reduction app, while Lemonade uses AI functions to reduce prices and offer the best policies.
Primary and optional features
Let’s summarize which essential features you probably will need for your car insurance app. You can also see the example of Geico’s app interface above.
- A clear user profile. Your customer should see their name, personal data, and settings and be able to easily access all other functions from the main menu.
- Customer support and notifications. Similarly, it is a basic functionality of the application. The support team should always be available if your customers face a problem or find a bug in your app. Notifications include reminders, and all of them should be fully and transparently manageable.
- Policy search and filter. No matter which app type you have, you should provide the search engine and a set of filters for your customers to search for policies they want and need.
- Policy management. The list of operating policies should be clearly visible, with their short descriptions, all links with the mandatory information, and bills.
- Claims. The button to fill a claim and a list of active claims should be present in this section. In addition, the app should provide all information regarding the customer’s rights regarding the claim filing.
- Payment processing. Your car insurance app customers will pay for premium features, subscriptions, and insurance. You must ensure that their payments will be comfortable and secure.
- Privacy encryption. As you already see, your app will proceed with personal data of the customer, including their payment details, so you must invest in cryptography to protect all that data.
Optional features for various types may include:
- Monitoring the environment and driving behavior. You can connect your app to various smartphone sensors. It will enable your app to make decisions based on the driver’s actions, providing safety tips and proposing the best policies. In addition, as you saw in Root’s example, it enables the app to be much cheaper and more efficient.
- Machine learning features in the back-end. They will empower your application by enabling the app to analyze tremendous amounts of data and quickly make decisions for your users quickly. It is an especially strong option in connection with the previous one. As you saw in Lemonade’s example, it is worth it.
- Databases for drivers with tips. While it seems to be a small feature, it can be extremely helpful. Combined with monitoring features, an app can provide tips based on the driver’s behavior.
- GPS options and maps for tracking dangerous places and situations, allowing drivers to avoid them and be careful.
As you can see, there are plenty of features that you can integrate into your car insurance app. The list is incomplete, as you can always introduce your own new feature, which will be helpful for drivers!
Is it actual?
Let’s review the insurance market to answer this question. You probably think that insurance is a highly conservative and competitive area, where everything is divided between large players.
But the growth in the global insurance market is tremendous, according to various statistics. You can see examples below. It’s especially true for digital insurance (InsurTech), and you can easily enter the growing market and obtain revenues. As you can see, there was a sharp decline in 2021 due to COVID-19, but the industry is recovering and continuing to grow.
You can also expect that the revenues in InsurTech will grow from $5.48 billion in 2019 to $10.14 billion in 2025, according to the Businesswire report.
So yes, it is actual.
How to monetize?
Let’s reformulate to be clear: which paid services can you provide to your customer?
- Insurance payments. You can develop your own successful insurance company if you can propose an innovative approach, such as Lemonade or Root.
- Paid subscription. If you develop an insurance plans comparison app, it can have a paid subscription, choosing the right insurance plan for your customers.
- Premium functionality. It is optimum for risk-reducing apps. Drivers will probably be ready to pay for features that monitor their driving behavior and provide tips for reducing risks. As mentioned, you can add a lot of other premium features but do not forget to test them first.
Car insurance app development is a profitable niche due to the rapid growth of the InsurTech industry. Before the development, make sure to become familiar with insurance laws and regulations to understand which information you should provide mandatorily and how to secure customers’ data.