Cuvva launching pay-as-you-go car insurance aimed at infrequent drivers

Cuvva, the Scottish startup that reckons it’s spotted a gap in the market by offering hourly car insurance sold through a mobile app, is set to launch a novel and potentially disruptive new type of car insurance designed for infrequent drivers.

It’s well known that many people who own a car drive it less and less these days, especially those who live in a city, and yet conventional car insurance does a relatively poor job of reflecting this in the premiums we pay.

Cuvva’s new product, which opens its doors in April, wants to end the status quo that sees drivers pay for expensive insurance when their car is sat idle on the side of the street or on their drive.

Here’s how it will work: Cuvva will let you buy insurance via a monthly subscription of between £10 and £30, depending on the car and where you live. You then purchase premium ‘top up’ insurance via the Cuvva app, starting from £1.20 an hour, during the time you plan to actually drive your car.

Like regular insurance, you can still earn a no claims discount each year, and I’m told the new product is targeting those who rack up fewer than 4,000 miles a year.

Says Cuvva founder Freddy Macnamara in a statement: “It was ridiculous that I couldn’t borrow a car for an hour, because of the difficulty of getting short-term cover. I could order an Uber or a Deliveroo to my house, but I couldn’t buy insurance for a short period quickly. We realised that we could use the same mechanism to save infrequent drivers a huge amount of money. Saving £500 to £1,000 a year on your car insurance is life-changing. Everyone can think of someone who will benefit from that.”

Meanwhile, Cuvva is announcing £1.5 million in new funding, in a round led by LocalGlobe, the VC fund founded by father and son duo Robin and Saul Klein.

The startup’s other backers include Tekton Ventures, Techstars Ventures, Seedcamp, Nick Hungerford (founder of Nutmeg) and Ian Hogarth (founder of SongKick). Cuvva has raised £2 million since being founded in late 2014.