Is Online Crowdfunding the Next Insurance Product?
Spoiler alert – the answer is no…at least not in the near future. But this is a topic that pops up everyday as crowdfunding is frequently displayed on our social sites; giving you endless examples of how these online communities can respond when someone needs help or financial assistance to make them whole. Sounds like insurance doesn’t it?!
For this thought, and in this moment, we are going to talk about gofundme as it is the most frequently used, by far, for insurance related events – or should I say, non-insurance events. So what the heck does that mean?
For instance, let’s talk about a high profile event……..the Keene Riots that took place near the Keene, NH Pumpkin Fest…..dun dun dunnn. (No clue if that's spelled right but you get it)...
That brings us to Tyler’s car which was flipped at the Keene Riots in October of 2014. Although none of us know Tyler, I bet the majority of us actually know of his car. As the picture of four young gentlemen stomping on the overturned vehicle was shared across the country and parts of the world.
This seemed to be the lasting image that people had of the Pumpkin Fest. So what did this represent to Tyler? Well, as his gofundme page stated: “My policy with my insurance company does not cover me for the damages”. Now as an insurance agent reading that, and looking at an ’01 Nissan Maxima, we are going to assume for the sake of this article that Tyler did not carry full coverage.
So what if Tyler did carry full coverage on his vehicle? It’s safe to say that he would have been covered for the damages that occurred, minus his deductible. But that wasn’t the scenario. Someone that was either a friend of Tyler’s or someone who was just aware of the event started a gofundme page to help fund the damages to Tyler's vehicle.
Here’s the power – this post was shared 5.3k times and received 282 donations. Could we go as far as saying that Tyler’s vehicle was underwritten 282 times? Resulting in a financial payout of $4185, which exceeded a $3800 donation goal. In this scenario, Tyler wasn’t penalized for not carrying full coverage (once again, we are assuming) and his digital community wrote him a check just as one of our insurance companies would have.
How else could this work? A frequent scenario we see is when a loved one passes away and a family is left without that individual's income. It is very common to see someone start a gofundme page for the family – This sounds like Life Insurance to me.
Or, once again – someone get’s injured and has outstanding medical bills, which their online community steps in to help out with – This sounds like Health Insurance to me.
And again, someone’s basement flooded ruining $30,000 of their personal belongings for which they sought help online through gofundme – This sounds like Flood Insurance to me.
And one more time... – someone’s barn burned down with two cars in it and because they didn’t carry auto insurance, the vehicles were not covered because they’re not considered personal property – This sounds like car insurance to me.
And lastly – well, you get the point... (All of the examples above are currently real gofundme campaigns)
In most instances, the people seeking financial aid through these resources and websites have had some type of insurance in place. Unfortunately, what I have found in my research, is that the assumption is always that they are covered for everything. But the reality is, they have had exposures and gaps in their insurance products or programs, which have led to personal loss and tragedy.
To wrap this all up for you – I love seeing the outpouring of help and support that you can find on these websites. I actually think it represents community in the new age. But I think it is very important that people understand how they’re insured and what they’re covered for so they don’t find themselves on these forums at all. Asking your agent questions is a good thing, not a bad thing.
To keep in touch, please feel free to reach out to me via email at cmcintosh@clark-mortenson.com or online via my twitter page.
