While cryptocurrency is already growing at a rapid pace, one can find only a handful of insurers offering coverages priced and valued in digital currency. Moreover, as far as blockchain-based car insurance coverage is concerned, the application for this type of car insurance is yet to be developed.
After all, insurance policies are designed to limit the amount of liability that insurers will assume in the event of loss or damage based on agreed terms and conditions. Yet cryptocurrencies are volatile money, which in a near or far future could present a dramatic change in values that will nullify the viability of offering a crypto-valued shield against potential risks. In the same way, client expectations on the amount of coverage for their assets is not assured, since the use of blockchain technology for monetary transactions is still loosely regulated.
The primary challenge for most insurers is the difficulty of calculating the value of possible risks since there is lack of sufficient information on which to develop a model for insurance pricing and valuation.
Secondly, there is still little room for growth, as clients still need to understand how a cryptocurrency insurance protection will work in a way that will not put them at a disadvantage in the long run.
Thirdly, there have been numerous cases of cryptocurrency cyberattacks and scams that make cryptocurrency insurance a less appealing choice of protection.
Some Known Examples of Cryptocurrency Insurance Already Offered
In some European countries like Germany and Norway, the use of cryptocurrency, particularly bitcoin, is already widely accepted and at the same time regulated. As opposed to digital money in the U.S. that has yet to gain legal recognition before American consumers can fully appreciate the significance of a crypto insurance coverage. Nonetheless, the following U.S. based fintech firms have already ventured into the business of offering insurance policies for certain assets:
Bee Nest – Based in San Francisco, California, this fintech collaborated with We Trust a fiduciary company. Together, they developed a blockchain-based insurance model for homeowners. In line with the offering, Bee Nest uses a proprietary digital currency called Bee Token, which the fintech initially introduced as digital currency that can be used in booking accommodations in the San Francisco area.
Guardtime – A fintech based in Irvine, California that partnered with logistics behemoth Maersk in developing a blockchain-based marine insurance. Using what fintechs call as “Smart Contracts,” Guardtime’s cryptocurrency maritime insurance policy offers a way of managing unchanging risks as they occur in the shipping industry.
Lemonade – This insurance company based in New York City uses blockchain-based technology in combination with artificial intelligence in offering cryptocurrency insurance to homeowners and renters. The Lemonade crypto insurance model involves the collection of a monthly premium starting as low as $5 per month, to cover a fixed insurance fee, while the remaining portion is allocated for future insurance claims. Claims for a loss must be made immediately to allow for quick valuation of loss coverage.
If you have been reading this in relation to your search for a cryptocurrency car insurance, and in case you do find some, our advice is not to walk into any such offers blindly. Even when looking for a regular car insurance policy, you have to shop around and make comparisons to make sure you will be getting a reasonable deal and adequate coverage.
The good news s that you can find all pertinent information you need at https://carinsurancesnearme.com/ when in the process of evaluating your options.