Year on year, the world becomes increasingly unsafe despite technological advancement. More than ever before, the need to secure our lives and belongings has become even more critical.
Today, the world turns to insurance companies to insure their life, health, liability, home and even cars.
While these companies have helped many optimise risk, they do so charging exorbitant premiums, further creating an unaddressed gap where a pool of low income earners is languished.
As it is in the United States, Canada, Europe, Spain, Brazil, Nigeria, Ghana, so is it in South Africa, world’s 24th-most populous nation with over 59 million people.
Industry review revealed that car insurance in South Africa is often managed by insurance companies who increase their premiums with short notice. Even worse, these companies offer lacklustre services, making the insurance process outrightly frustrating.
Vaai.co is a black-owned insurtech startup offering affordable on-demand car insurance solution that enables consumers purchase insurance they can afford and recharge it when required which can be likened to prepaid.
By research, experts established that 70% of South Africans do not have car insurance.
With such deficit and the opportunity to leverage technology, it becomes easier for Vaai.co to penetrate into the market, creating cost-effective car insurance for locals especially when compared to the traditionally expensive insurance plans available.
Why the need:
“Insurance companies actually penalise you if you live in a poorer area and drive a cheaper car – they charge less to insure fancy cars in fancy areas. It just makes no sense to me that those South Africans who need better prices are quoted more!
“Plus most of us are hardly driving our cars during Covid-19. Vaai.co developed the answer for those who can’t afford ongoing car insurance and those that have had enough of the great car insurance rip-off,” Co-founder Thabang Butelezi explained.
As a differentiating peck, Thabang further noted that the offering was designed to be history-independent, affording citizens to subscribe according to their financial capabilities.
He said: “And we also don’t care about your claims history. We keep things very simple – you select the amount of cover you need for the next 24 hours based on what you can afford.”
What you should know:
- The insurtech startup was founded by Thabang Butelezi and Duncan Barker and was officially launched in January 2021.
- The startup enables consumers to purchase prepaid insurance that is valid for 24 hours.
- With the prepaid system, users are able to select insurance according to their budget and access all the servcies offered by the insurtech startup on the free and easy-to-use Vaai.co app.
- Users can make payments for the insurance via the app or with a cash payment that is accepted at FNB ATMs.
- Subscribers can get a cover for less than the price of two 2 litre cold drinks- R13 000 cover and the availability of more money, they can purchase up to R120 000 worth of cover.
- Vaai. co’s services are not a replacement for traditional car insurance as it offers affordable basic cover per day only for car accidents especially for those times you think a specific driving occasion is riskier.
- Contrary to traditional car insurance, Vaai.co offers car insurance with zero excess fees from day of purchase and with no debit as traditional car insurance charges a costly excess when a client has been in an accident.
- The startup’s services are currently available in Johannesburg but it plans to expand nationally as at the time of this report.
- The insurtech startup took part in the AlphaCode Incubate programme.
How to get started with Vaai.co:
In order to utilise the service, users must purchase a once-odd data logger that costs R350.
This device is delivered to users to run a diagnostic on the vehicle to save users money on expensive mechanical and electrical damage.
The device is able to detect if a user has been in a major accident and is able to dispatch a towing service if an accident occurs.
Asides the above feature, the app also include roadside assistance, choose plan etc.
This framework has potential to make a good market in Nigeria if properly implemented.
Are you already seeing an expansion soon?