Delaware Business Insurance Update From CNC Insurance Associates Inc. " The Sharing Economy and Insurance" 8-5-15

The "sharing economy" is on the rise.  Young consumers are looking to save costs by sharing everything. Housing, rides, personal property, technology, are just some of the areas where people are sharing expenses. So how will the insurance industry react?  The industry is not built on sharing insurance policies.  An insurance policy is a contract between the insurance company and the named insured. The industry closely reviews the named insured before writing an insurance policy. Even times where there are multiple named insureds, the companies underwrite to make sure they know who they are and the relationship to one another.
The new "sharing economy" presents some unique challenges.  Future consumers will want the flexibility to share risks with multiple people. This flies completely in the face of insurance company underwriting standards. The future consumer will want to share risks in a moments notice. This also poses a challenge to the historically slow and encumbering insurance industry.  The future consumer will demand that all the sharing participants get the right insurance protection. Again, the industry is not built for multiple protection for all under one contract of insurance.
Only time will tell if the industry can adapt and change quickly enough to handle the insurance demands of the "sharing economy". If it does not, new competition will emerge that can figure it out and maybe turn the insurance industry upside down.  Until next time be careful out there and know your risks.


G. Kevin Nemith President , CNC Insurance Assoc. & The Small Business Insurance Center
Serving DE, MD, NJ, PA & VA
www.cncinsurance.com
www.bizinsurancetv.org

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