You may have insurance, but is it always covering you? Many insurance companies have exclusions for extreme sports like skydiving. You may be covered while you’re on the plane and after you’re safely on the ground, but for the five minutes you’re in the air, you’re lacking coverage. The Detroit startup Re-Sure, which recently finished the Global Insurance Accelerator in Des Moines, is looking to extend coverage to activities many insurance companies exclude.
How Re-Sure Works
The idea came to co-founder and COO Gautham Pedditbhotla while he was snorkeling in Mexico. His hand was clipped by a whale shark’s tail, resulting in a nasty gash.
“I had health insurance from the company I was working for, but even in that case I had to pay a deductible,” Pedditbhotla said. “But I started thinking ‘What if I could buy insurance before I got on the boat?’ You can’t hold the boat owner liable for a freak accident.”
With Re-Sure, a user would pay for an hour or so of insurance before participating in a risky activity like skydiving, SCUBA diving or even things that don’t seem as risky, like playing in a soccer league. Re-Sure covers activities your insurance might not cover or covers any out-of-pocket expenses for your deductible.
Costs range from a few dollars up, depending on the duration of the activity and its riskiness. An athletic event would have lower costs than skydiving. A customer buys short-term coverage on their phone, or a skydiving company or bike rental service might offer it as an add-on to their fees.
“The idea is to partner with businesses, tour operators, skydiving and ballooning companies,” Pedditbhotla said. “Some of these are things people just do as a one-off, but millennials are doing them more often.”
Re-Sure and the Global Insurance Accelerator
When Re-Sure applied to be part of the GIA late last year, Pedditbhotla and CEO/co-founder Herb Gibson were still conceptualizing the business. They had considered a few other accelerators, but the GIA’s access to insurance companies made it their primary target.
“We had a conversation with Brian [Hemesath, GIA’s Managing Director] and at the time we were purely a concept,” Pedditbhotla said. “Given the concentration of insurance companies in this area, it seemed only natural.”
“Their tech absolutely intrigued us,” Hemesath said. “The hook for us is this is a bleeding edge tech play, and there’s a lot of potential for them. They were able to use our networks to determine what kind of market they needed to get into.”
Re-Sure has a pilot program set up for bike-share systems in Des Moines and Detroit, covering 3,000 bikes. Adding Re-Sure coverage to a ride covers any injuries a rider might receive or damage they might do to the bike.
“The idea is, it’s a capped risk and fixed payout,” Pedditbhotla said. “Bike riders are going from point A to B and the asset value is not that great. It’s a fractional cost and the severity is not that high. But this year alone there will be about 720 million rides, and by 2020 we’re projecting about a billion rides in the US.”
The future of Re-Sure
Pedditbhotla is sticking around Des Moines for the near future to help get Re-Sure established in the area. He’s hoping for a successful pilot, which will help establish new product channels and partnerships. From there, Pedditbhotla hopes to expand Re-Sure further.
“We definitely see global potential,” Pedditbhotla said. “The app exists everywhere, so people can take their coverage with them.”
Joe Lawler is a freelance reporter based in Des Moines.