KarChing founders Ramsey Gouda and Mark Hahs have crafted a solution that transforms driver's education and insurance accessibility for teens and their parents. If you have tried to insure a teen driver, you know it is difficult, and your wallet takes a huge hit. In fact, a newly licensed driver is looking at an average annual premium of $4400 annually. The reason? According to the CDC, car crashes are the leading cause of death for teens, and they have crash rates almost three times as high as drivers ages 20 and up. The dilemma—and thus the opportunity—is that new drivers have no driving history and, therefore, are quoted prices based on general statistical assumptions rather than driving behaviors.
The KarChing solution, fueled by a personal desire to combat distracted driving and lower insurance claims (and, of course, related fatalities) as well as modernize how new driver insurance is priced—not only incentivizes safe driving behaviors but also updates how insurance companies engage with young drivers and how they underwrite and price using modern-day tools of the trade. Gouda explains, "Our mission is to change how teen insurance is priced and sold and to reduce smartphone-related distracted driving and fatalities. KarChing is the only driving app built for teens and their parents that rates and rewards young drivers for good driving in the permit stage and rewards phone-free driving once licensed. In the end, Karching leverages the technologies of the day and streamlines the entire insurance process."
KarChing's "embedded insurance platform" brings the auto insurance industry's current mainstream practices to the last untapped demographic, who also happen to be the source of today's historically record-breaking losses. Essentially, it enables direct customer engagement through smartphones via mature cloud infrastructure and cellular networks, making it more convenient than ever to connect with customers before they're licensed. KarChing seamlessly integrates insurance tools and technologies into the driver education process BEFORE a teen gets their license, thus creating a data-driven "Predictive Time Machine" whereas there has been none before now. Telematics driving data will provide customized driving scores that empower insurance carriers to offer personalized, merit-based premiums and efficiently correlate rates to teen driving behaviors. Gouda notes, "This will ultimately drive higher sales volume and improve close rates while significantly improving risk ratings and loss ratios for insurance companies, all the while saving families money on insurance premiums."
On the rewards side, post-license, Gouda and Hahs have wisely designed a patent-pending system that circumvents the limitations imposed by insurance "rebating" regulations. By funneling the insurance savings directly to the teen drivers in real-time, KarChing ensures nearly immediate rewards for teens who drive responsibly, creating a win/win/win with safer roads, happier kids, parents and insurance companies who stand to save billions on auto-related costs and losses.
The driver's ed app is the cornerstone of KarChing's solution. KarChing collaborates with driving schools to transform them into their frontline insurance agents and revenue-sharing partners. They have pilots in over 18 states at 24 partner schools and public school systems in Illinois, Florida and Michigan—including Courtesy Driving School—which has 50k drivers annually.
Gouda explains, "Within our driver's ed partner program, we deliver insurance customers who are risk-rated, market-ready, and who must buy insurance." During this stage, KarChing tracks required drive time hours, gathers data, and identifies families with teen drivers. By meticulously logging driving data and assessing the quality of each drive during the aldricer education stage, KarChing provides carriers with invaluable insights into teen drivers' behavior from 6–18 months before they obtain their license. This data is crucial for insurance companies to enable them to tailor premiums based on actual driving performance rather than historically inaccurate statistical assumptions.
Furthermore, Hahs explains, "KarChing's technology incorporates physical activity data to accurately detect instances of phone usage, hard-braking, aggressive accelerations and other current standard methods of assessing risky driving." This telematics-based approach ensures a comprehensive evaluation of driving behavior, empowering both teens and insurance providers with actionable insights.
The KarChing process involves getting the parents and teens aligned from the very beginning and creating a team-like approach that ultimately rewards tweens with straight-up cash incentives and rewards. Hahs adds, "Education of parents is crucial as they play a role in the teen insurance rating process from the beginning. The technology assists in streamlining the input of data related to finding the best rates on insurance."
Hahs shares, "Ultimately, we help families save money on insurance premiums for the highest-risk driver segment and present carriers with new customers who have lower claims rates by analyzing and presenting data insights on the lowest-risk drivers who must buy insurance."
KarChing's sophisticated quoting platform further streamlines the insurance sales process, making it seamless and user-friendly. By leveraging the same technology platforms used by insurance companies, KarChing ensures compatibility and reliability while providing users with a hassle-free experience.
KarChing's innovative approach to teen driver safety and insurance accessibility represents a monumental change in an industry ripe for disruption. Through its driver's ed app and pioneering insurance pricing model, KarChing not only incentivizes safe driving behaviors but also empowers insurance companies with actionable data for more accurate risk assessment. With Gouda and Hahs at the helm, KarChing is redefining the future of teen driver safety and insurance practices, ultimately saving lives and revolutionizing an entire industry.
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