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Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

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Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#41

Post by funwhilelost »

jawns wrote: post #38

Wait, is Goodcover an actual cooperative, as a business structure? Because that has a specific meaning, especially with regard to insurance. (And there are a lot of mutual insurance companies out there that are genuinely, 100 percent member-owned.) But you mention venture capital and a rate of return for your capital partners. So how is Goodcover what you say it is? Sounds like a for-profit company to me. Saying you…

That's not entirely true. There have been a number of innovations in cooperative structures. For instance, many cooperatives need capital to get off the ground, or they're a capital intensive industry like insurance, and they'll introduce capital investors but they don't get voting rights.

It's not all that different than taking a business loan which requires repayment of the capital - but the bank doesn't have voting rights and doesn't attend board meetings.

I'm curious to hear more about Goodcover's structure, too, like what rights do members have beyond dividend returns. I've, personally, always thought that my needs from insurance companies are significantly lower than many peoples. The thread below about 4+ years of expenses paid absolutely blows my mind. I would _never_ expect my insurance company to do that and I'd hope to get proportionally lower premiums.

My hope for the proliferation of cooperatives is to provide more diverse offerings in every industry and combat the consolidation that we're seeing everywhere. That said, I understand that the insurance industry is under a tremendous amount of regulation (for good reason) and I might make bad choices as a consumer.

One of the other perks of cooperatives is their commitment to benefiting members which could include much better education and support around policy options.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#42

Post by chrisplotz »

jawns wrote: post #38

Wait, is Goodcover an actual cooperative, as a business structure? Because that has a specific meaning, especially with regard to insurance. (And there are a lot of mutual insurance companies out there that are genuinely, 100 percent member-owned.) But you mention venture capital and a rate of return for your capital partners. So how is Goodcover what you say it is? Sounds like a for-profit company to me. Saying you…

Thanks for your question, it's an important one, and deserves more than a handwave answer. When we started Goodcover, our goal was to make it so we were not in conflict with our Members - and the core of this is a cooperative model.

The original business model we were looking for is known as a "Reciprocal Exchange" (RE) - a type of co-op or mutual (like you mention) where the members own the claims capital, but the business is managed by a company called an "Attorney in Fact", which is usually a for profit (Farmers is an example). That would be us - we’d make money providing an amazing service to as many people as possible.

Unfortunately, we found out from the CA regulators very early on that starting a Reciprocal Exchange today was basically a non-starter. The capital requirements I mention in "Quirk 2" mean we can't just raise money from somewhere and kick-start the RE. We would need to get future-subscribers to put up the cash, and the amount we were talking there was just not possible. Farmers started in 1928 with a loan for their backend capital, something that is illegal today. So we were stuck - how do we start a new co-op insurer given this requirement?

The above story is the process of us figuring that out. Goodcover is an MGA that manages insurance on behalf of its Members, like an Attorney in Fact does for an RE. However since we can't have an actual RE until we have sufficient number of Members, we rent the capital backstop from conventional carriers. They pay us a fee and return the "underwriting profit" to us (that part is even more complicated and can talk later if you want), which we then return to Members, like Farmers should, but doesn’t anymore.

So, long answer - but yes, we are a for profit company. We operate the insurance like a cooperative, but like many other coops we do that for a for-profit fee. But, given the regulatory environment today we don't really look like your 1920s co-op!

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#43

Post by NicolasGorden »

Great business concept. I loved the write up, made me think of my own trials and tribulations as an ex-entrepreneur.

As a marketing guy though, I saw a few points I'll mention in case you want to implement. I'm sure the editing will improve your conversion rate:

1- Authority logos - I'm pretty sure the average renter won't recognize them. Find more recognizable logos to use, or don't use them. The whole purpose of authority logos is to leach off the goodwill people might have to brands they know and love. If they can't recognize the authority logos, that defeats the point of having them.

2- I'd change from "TV Famous Insurers" to "Geiko" or whatever specific one you are talking about (lemonade uses specific names on their landing pages for a real good reason)

3- Clarify the meaning of "Free Insurance" - I'd use the Get 1 Month Give 1 Month of FREE Insurance" or simply "One Month of Free Insurance". I'd then make the text under the headline much clearer. Why you do something isn't as important as what the end user gets, avoid getting bogged down in too many details.

4- Testimonials need to look more like testimonials. Use pictures or something that shouts 'this is a testimonial'. The colored boxes look cool, but I believe design should always follow function.

5- I'd avoid mentioning the packages on the lander/home. Just mention the highlights "From as Little as $5 for insurance of up to $500,000". Moving people through the funnel before you get into details.

6- Avoid the word 'ruthlessly'.

7- I'd include a hero shot or something a little more human. The page is a little dry.

Overall though, I love the concept and will likely sign up soon (my wife generally handles that, but I'll bring it up to her) - The website is also super well done, my comments aren't trying to detract from that in any way. Just trying to give feedback to make it even better.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#44

Post by chrisplotz »

NicolasGorden wrote: post #43

Great business concept. I loved the write up, made me think of my own trials and tribulations as an ex-entrepreneur. As a marketing guy though, I saw a few points I'll mention in case you want to implement. I'm sure the editing will improve your conversion rate: 1- Authority logos - I'm pretty sure the average renter won't recognize them. Find more recognizable logos to use, or don't use them. The whole purpose of au…

Thanks for the advice! As an insurance guy... I am always in need of advice from marketing folks! So thanks again.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#45

Post by DoreenMichele »

Glad to see this.

I worked in insurance for a few years and I am sometimes flabbergasted that it's legal. Good job analyzing where (some of) the sticking points are and working through them.

I hope this actually works and gives us a new model that makes me stop seeing insurance like some kind of evil empire.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#46

Post by chrisplotz »

subhobroto wrote: post #40
chrisplotz wrote: post #39

Earlier quoted context omitted.

Firstly, I'm sorry to hear about your community, that is rough and hope people are ok. And thank you (and your fire buddies - my cousin is a wildfire-fighter) for all your work to keep your community safe! To your question on self insurance - it's a matter of risk and statistics. No insurance is less money up front than coverage, but you retain the risk which may or may not cost a lot. We give a quote everywhere, and…

> CA has a non-renewal moratorium in force for wildfire areas Thank you sharing the link as this raises a question I think you are perfect to ask: What are your thoughts on this regulation? Would it now, in effect, significantly increase premiums for everyone now that an insurance company cannot drop the high risk customers? Feel free to email me as the answer might be not something you want to make public. If you ca…

So, given the underlying risk, I think the premium for wildfire in CA will be going up in general with or without this. The moratorium on non-renewal only lasts one year, and really just reiterates existing law. Most insurers have been trying to adjust their rates long before this came out.

How much is hard to say. An old mentor of mine always said, "There's a price for every risk, but sometimes it's as much as the limit of insurance." That's a bit geeky but basically, as wildfire becomes more common, the models will adjust to accommodate. Community efforts to make their communities more resilient will go a long way though, like mentioned above.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#47

Post by chrisplotz »

DoreenMichele wrote: post #45

Glad to see this. I worked in insurance for a few years and I am sometimes flabbergasted that it's legal. Good job analyzing where (some of) the sticking points are and working through them. I hope this actually works and gives us a new model that makes me stop seeing insurance like some kind of evil empire.

Thanks!!

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#48

Post by funwhilelost »

chrisplotz wrote: post #42
jawns wrote: post #38

Wait, is Goodcover an actual cooperative, as a business structure? Because that has a specific meaning, especially with regard to insurance. (And there are a lot of mutual insurance companies out there that are genuinely, 100 percent member-owned.) But you mention venture capital and a rate of return for your capital partners. So how is Goodcover what you say it is? Sounds like a for-profit company to me. Saying you…

Thanks for your question, it's an important one, and deserves more than a handwave answer. When we started Goodcover, our goal was to make it so we were not in conflict with our Members - and the core of this is a cooperative model. The original business model we were looking for is known as a "Reciprocal Exchange" (RE) - a type of co-op or mutual (like you mention) where the members own the claims capital, but the b…

Thanks for sharing this extra detail. Your industry is obviously much trickier to navigate than the service industry our worker co-op is in.

Do your members get any voting rights or other feedback mechanisms?

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#49

Post by TheBill »

Hey, product looks awesome, something I would put time into:

Large landlords: They often mandate specific coverage, and will cross sell & promote you into their tennant email/welcome kits.

EQR requires something like 100K of liability in the bay area, gives you 30 days from lease effective or so to secure a policy or they auto enroll you in a $10/Mo from another vendor.

Re: Launch HN: Goodcover (YC S17) – Cooperative renters insurance for half the price

#50

Post by pmiller2 »

chrisplotz wrote: post #5
staticautomatic wrote: post #3

Your maximum ALE coverage ("Temp Housing") is unconscionably low for any major metro area, metro area with a tight housing market, or area with rent control.

Thanks for your comment. The default scales with our property coverage (and you can top it up too) ending up at $50k total. What number would you be looking for here?

Why should the relocation benefit scale with the value of my stuff?
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