Start-up broker Cuvva launches pay-as-you-go motor insurance

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Pay-as-you-go broker, Cuvva is to launch a car insurance product for people who use their vehicles infrequently.

Customers will be able to buy insurance by paying a monthly subscription of between £10 and £30, depending on the car and where they live.

Drivers will then pay a top-up premium from £1.20 an hour, via an app when they want to drive the car. 

Primarily aimed at city-dwelling customers who rely on public transport, the start-up insurer said that this pay-as-you-go method could save low-mileage drivers up to 70% of the cost of a premium.

Freddy Macnamara, founder of Cuvva, said: "Technology has changed so many industries and given consumers cheaper, more convenient alternatives. Yet car insurance continues to be opaque and inflexible, costing some people a lot more than it should.

"Whether it is borrowing a car from a friend for a short period of time, or owning a car that you don't drive much, many people get an unfair deal when it comes to car insurance."

According to Department for Transport and Driver and Vehicle Licensing Agency figures, there are around six million cars in the UK that are driven very infrequently.

The Cuvva founder said that the product is filing a gap in the market where short-term cover is hard to purchase.

"It was ridiculous that I couldn't borrow a car for an hour, because of the difficulty of getting short-term cover," said Macnamara.

The company has raised £2m in funding since it was started and recently completed a £1.5m funding round, led by venture capital investors Local Globe.

Ophelia Brown, general partner at Local Globe, said: "Pay-as-you-go insurance is a long overdue product in the UK, where increasingly the trend is for drivers to use their cars less and less.

"It's crazy that people's premiums haven't and can't change to reflect that. Cuvva understands that, just as consumers expect price transparency and flexibility with all other financial services, they should also get that with their insurance."

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