PeerCover is a New Zealand based community insurance platform that enables users to create a group to cover risks typically excluded by insurance policies. Such policy exclusions include illnesses relating to pre-existing medical conditions, dental cover, maternity, sports injuries, mental health treatments and asthma treatments because these are considered pre-existing conditions. This is where PeerCover steps in with “Community Coinsurance”.
Crowdfunding Cover or “Community Coinsurance” as PeerCover labels it:
How PeerCover crowdfunding works?
- Users join groups and pay the required deposit (approximately $20). Users need to be over 15 years old and a member for at least 6 months before a claim can be submitted.
- If any member has a “life event” and needs to claim, the group decides if claims are fair. For example, if a PeerCover member breaks his/her leg during an extreme sport (base jumping or paragliding) his/her health insurer may refuse to pay under the cover limitations specified in the policy. Thus, the PeerCover member will claim against the pool of premiums within his/her member group.
- Post claim validation, the member gets his balance plus support payment (determined by the life event severity and the age when joined) from all the group members.
Currently, PeerCover has two separate clubs to choose from, the New Zealand club and the International club. Its role is essentially to manage the member’s support payments and lets them know when their balance is low. In return, PeerCover charges a 5% fee on all balance top-ups to administer the club. Interestingly, PeerCover is using Bitcoin to manage the international club deposits and support payments.
Although PeerCover’s current form has evolved from a pure P2P insurance framework to a community model based on policy exclusions, its success will reinforce the belief that elements of P2P insurance models can scale.
Participate in our next webinar on the theme of “Peer-to-Peer Insurance & Community” on Wednesday, 8th February 2017, 9am-10.15am (UK time). To hear more about P2P product/model register below