Insurtechs: Dupe or be Duped

What is an insurtech anyway?

An insurtech isn’t what you would consider a traditional insurance company. Many new insurtechs have entered the insurance industry, and there are good and bad things about them.


  • Insuretechs have fast and consumer friendly websites created to provide quick quotes and easy to purchase policies. This is where the good ends.


  • They are not backed by traditional insurance companies with years of experience & knowledge. They are normally backed by several layers of investment companies whose number one goal is a return on their investment. You never really know who is going to pay your claim.
  • Unfortunately, these new insurtech companies have joined the industry in the most challenging insurance climate in a generation. During the years 2022 – 2025, many insurance companies failed and have withdrawn from markets, so you can only imagine how the insurtechs are struggling.


While these insurtech websites are very easy to use, they are programmed to offer lower prices by underinsuring the structure and leaving out or limiting very important coverages.

  • Lower Dwelling Coverage: In my recent quoting experiences, I entered all of the information on one of my own rental properties. The website quoted $201,000 to rebuild a 1900-square-foot rental property, about half of the actual rebuild cost. The disadvantage is that in the event of a claim, whether it be a total loss or even a partial loss, the policy contains language that will further penalize me for underinsuring the structure. Insurance Requirements for a Utah Commercial Lease Agreement | Anderson Insurance Group
  • No Extended Dwelling Replacement option is available. Extended Dwelling Replacement will add an additional 25% of dwelling coverage in the event of a total loss. For example, $400,000 in dwelling coverage X 125% = $500,000 max dwelling coverage. The absence of this option is a glaring weakness in coverage.
  • Fair Rental Value/Loss of Rental Income: The “recommended” Plus coverage from this company only included $20,100, not nearly enough to cover twelve months of lost rents, the minimum amount of time it would take to rebuild this property.
  • Water Damage Sub-limit Limitation: This is perhaps the most glaring deficit in their coverage. Many insurtechs will include a sub-limit for damage from water, the most common claim received by insurance companies. Sub-limits are a new strategy to limit an insurance company’s exposure to a specific loss. Every year, we have several water losses that exceed $100,000, and these new insurtechs can have water damage sub-limits of $30,000 or less.

These are just a few of the deficiencies of the coverage offered by insurtechs. Only a seasoned and experienced insurance agent is going to recognize the coverage that the insurtech company has omitted.

Another great danger of insuring with insurtechs is that you represent yourself. You are the one who made the declaration on the application and if the coverage you need to rebuild or repair your home is not there, you are out of luck, you have been duped. When you insure with a local and knowledgeable insurance agency and an important coverage has been left off, you can pursue a claim against that agent’s errors and omissions coverage for not including that coverage.

In biblical times, they would call today’s insurtechs wolves in sheep’s clothing. These slick and impressive online proposals are programmed to omit important coverage and lead you to select inferior coverage.

Don’t get confused and duped in the insurance cyber world! For the best protection of your home or rental property, reach out to a knowledgeable and experience agent at Anderson Insurance Group today.

Anderson Insurance Group – Salt Lake City – Utah

RHA Utah | Rental Association of Utah Home

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