AlohaR1TR1S

Member
First Name
Hans
Joined
Aug 31, 2019
Messages
5
Reaction score
8
Location
Kona Hawaii
First Name
Hans
Vehicles
Ford Raptor/F150
Rivian To Partner With Nationwide For Insurance Program | WGLT

Rivian To Partner With Nationwide For Insurance Program

April 28, 2021

Rivian’s plans to sell insurance for its electric vehicles are now taking shape, with new details released about data-driven coverage and a partnership with established underwriter Nationwide.

Rivian already is at the forefront of electrification and autonomous driving. Now it appears to be on the leading edge of another trend—carmakers that sell insurance, too. And that carries special meaning in Bloomington-Normal, where State Farm is based and where Rivian will make its EVs.

Rivian recently announced plans to sell insurance products as part of its digital ordering process. The company says by linking insurance to the vehicle itself, it will be able to diagnose issues more quickly and comprehensively, and even remotely. And those who use Rivian’s mid-level autonomous driving tool can get discounts on their insurance rates. Customers also will be able to insure their home, recreational equipment, and other vehicles.

Rivian Insurance will be available to customers in 40 states initially; insurance is generally regulated state-by-state. The policies will be underwritten by third-party carriers. Rivian has not disclosed who they will be, but Columbus, Ohio-based Nationwide confirmed to WGLT that it’s a partner. It’s unclear if there are others.

“When customers purchase their Rivian vehicle, the company will offer customers auto insurance products underwritten by Nationwide,” a Nationwide spokesperson said in a statement. “The partnership will lead to improvements in product development and customer service experience for both companies. Rivian is a great example of a company that develops products with the best interest of the customer in mind. They are revolutionizing the electric vehicle and connected car industry, and Nationwide is proud to provide our best-in-class products and digital infrastructure to help them meet their customers’ needs.”

What Rivian is doing isn’t entirely new. EV pioneer Tesla started selling insurance to California vehicle owners in 2019 through its partner, State National. GM recently launched data-driven coverage via its OnStar Insurance subsidiary.

"The carmakers are essentially acting as brokers here, more than insurance companies."
The reason it’s possible is because of telematics, also known as usage-based insurance (UBI), a trend that’s grown within the insurance business for the past decade or so. That’s technology inside of a car that can track how fast you accelerate, how hard you brake—in other words, how risky you are. With super-connected vehicles like Rivian’s, there is simply more data available.

“We’re going to continue to see more of this,” said Sam Abuelsamid, principal analyst for e-mobility at Guidehouse, based in Detroit. “It’s because the automakers have access to that data, and they can work with the insurance providers to be able to give an opportunity to their customers to maybe get lower premiums.”

Drivers are warming up to the idea. Survey results from May 2020 showed about half of drivers were comfortable sharing their data with their insurer, according to Mark Friedlander, a spokesperson for the Insurance Information Institute, an industry think tank.

“We saw significant growth of this technology during the pandemic,” Friedlander said. “(Usage-based insurance) was a key factor in U.S auto insurers providing $14 billion in premium relief to drivers last year, because UBI was used to indicate how much less people were using their vehicles.”

Rivian did not respond to WGLT’s requests for comment for this story. But experts say there are a few different reasons why it would want to sell insurance. WGLT previously reported on Rivian’s insurance plans in 2020 as it staffed up its team.

Electric vehicle customers, including Tesla’s, have often complained about getting slammed with higher rates.

There also may be an opportunity for a little extra revenue. Typically, there’s some sort of revenue-sharing model between the automaker and its third-party carrier, said Abuelsamid.

“The carmakers are essentially acting as brokers here, more than insurance companies,” he said. “So they may get a share, a hit, of the premium payments as long as the customer stays with that program.”

And, as a marketing tool, Rivian can argue that tying together insurance and the vehicle will produce a better customer experience. Every Rivian vehicle is equipped with the company’s Driver+ suite of safety technology. Rivian Insurance customers will automatically receive a Driver+ rate reduction, in addition to any discounts for using the feature that automatically steers and adjusts speed on the highway.

“They can provide a lot of services to their customers. They can develop a one-stop shop business model for their customers,” said Yayuan Ren, an associate professor in risk management and insurance at Illinois State University’s College of Business.

There is disagreement about whether plans like Rivian’s pose a competitive threat to legacy auto insurance companies such as State Farm or Allstate. Presumably, a customer could just decline Rivian Insurance and buy a policy out on the open market—with no middleman.

“They pose a competitive threat to the existing insurance industry,” said Ren. “They bring competition to this industry, and that’s beneficial to customers.”

Mark Friedlander with the Insurance Information Institute disagreed. After all, Rivian isn’t actually underwriting the policies. A traditional insurer is still getting business.

“This is a new way to market your business to drivers. It’s expanding the marketplace that’s already out there for telematics and making it easier to access coverage,” said Friedlander. “It’s clearly an add-on. It’s complementary to what’s already out there in the marketplace. We don’t see it as competition.”





Advertisement

 

cohall

Well-Known Member
Joined
Mar 30, 2020
Messages
330
Reaction score
805
Location
Denver
Vehicles
Volvo XC60, Ducati SC1000
Works for me. My home/auto/umbrella are already with Nationwide. Assuming rates are somewhat reasonable, should make life easy.
 

LoneStar

Well-Known Member
Joined
Aug 2, 2020
Messages
332
Reaction score
781
Location
San Diego
Vehicles
'20 Honda Clarity PHEV, Rivian R1T Launch Edition
Occupation
Engineer
I am both jazzed and a bit worried about the 'telematics' data determining my insurance rate. How does this play out when a driver occasionally (or frequently) exceeds the speed limit? Or accelerates from a stop or pass-by with lots of vigor? Is there a cap or limit on the high side for the quoted insurance rate? Or can a month of frolic drop a unexpectedly large bill on you. These same questions play into Rivian's warranty provisions. The published warranty is fabulous but what if a couple years down the road something needs servicing and Rivian says, "sorry, warranty voided because we noticed you went 90mph a few times or drove it like you stole it way too often."
 
Last edited:

CommodoreAmiga

Well-Known Member
Joined
Dec 30, 2020
Messages
732
Reaction score
921
Location
USA
Vehicles
N/A
I am both jazzed and a bit worried about the 'telematics' data determining my insurance rate. How does this play out when a driver occasionally (or frequently) exceeds the speed limit? Or accelerates from a stop or pass-by with lots of vigor? Is there a cap or limit on the high side for the quoted insurance rate? Or can a month of frolic drop a unexpectedly large bill on you. These same questions play into Rivian's warranty provisions. The published warranty is fabulous but what if a couple years down the road something needs servicing and Rivian says, "sorry, warranty voided because we noticed you went 90mph a few times or drove it like to stole it way too often."
I can't answer the insurance side, but I doubt you'll have any problems with warranty. Rivian built a vehicle for off-road use and says they're warranty covers that. If they didn't want you to go 90mph then they wouldn't have made it go that fast (it will go faster).
 

Gshenderson

Well-Known Member
First Name
Greg
Joined
Sep 28, 2019
Messages
493
Reaction score
896
Location
Park City, UT
First Name
Greg
Vehicles
2015 Tesla S 85D, 2019 4Runner TRD Offroad, R1T
I am both jazzed and a bit worried about the 'telematics' data determining my insurance rate. How does this play out when a driver occasionally (or frequently) exceeds the speed limit? Or accelerates from a stop or pass-by with lots of vigor? Is there a cap or limit on the high side for the quoted insurance rate? Or can a month of frolic drop a unexpectedly large bill on you. These same questions play into Rivian's warranty provisions. The published warranty is fabulous but what if a couple years down the road something needs servicing and Rivian says, "sorry, warranty voided because we noticed you went 90mph a few times or drove it like you stole it way too often."
If they aren’t going to be transparent about what drives your rates and by how much, I’m not doing it.
 

skyote

Well-Known Member
Joined
Mar 12, 2019
Messages
1,876
Reaction score
2,945
Location
Austin, TX
Vehicles
Jeeps, 2500HD Duramax, R1S Preorder (Dec 2018)
If they aren’t going to be transparent about what drives your rates and by how much, I’m not doing it.
I think you'll be fine until renewal time. Still wondering though if I might get a frantic call before the end of day one!
 

thrill

Well-Known Member
First Name
billy
Joined
Jan 14, 2020
Messages
270
Reaction score
452
Location
South Carolina
First Name
billy
Vehicles
i3s, z4m, hp4, (r1t)
I think you'll be fine until renewal time. Still wondering though if I might get a frantic call before the end of day one!
They could give us points to burn based on, err, aggressiveness. Then I could buy more the 2nd day!
 

Advertisement





 


Advertisement
Top