Insurers could soon be using GPS to follow your every move and change your cover minute-by-minute.
A new app which offers “on demand” insurance says that ultimately firms will be able to “micro-insure” a customer depending on where they are or what they are doing at any particular moment.
The system would mean that an company could automatically change the type of insurance a customer has depending on what they need at a particular moment.
The idea is similar to car insurance telematics plans which offer users discounts if they allow insurers to record when, where and how they are driving.
Currently the app, Trov, offers short-term insurance for electronics, such as cameras and mobile phones.
Users can turn insurance on and off for each item individually using the app. They can also use it to make a claim.
The company has a partnership with Axa to underwrite the policies, which they say will tackle the “underinsurance” problem among young people.
While policies will be slightly more expensive on an equivalent basis than others on the market, the company says that the ability to switch off the cover when it’s not needed will make up for this.
Currently it mostly insures small electronic items like laptops, mobile phones and cameras.
Scott Walchek, chief executive of Trov, said that it would tackle fraud by examining consumer behaviour and looking for patterns suggesting fraudulent claims, such as claims being made quickly after a user signs up.
He said: “Single item protection is just the beginning of what’s possible with a platform that can power microduration insurance.”
He suggested that the system could eventually be automated, removing the need for the user to turn the cover on at all.
A policy would cover them for all eventualities and all types of insurance, removing the need to pay for cover even when not completely necessary.
For example, if a cyclist is at home, their bike would be covered under their home insurance policy.
A GPS tracker in their phone would know when they had left the house and automatically switch their insurance on.
When travelling, they would need liability insurance – which protects them against legal claims if they are alleged to have injured someone else.
And when they reach their destination, and locked and left the bicycle, they would only need cover for theft or accidental damage.
All of these phases would be switched on automatically as the system would know where the user is and how fast they are travelling, as well as the locations of their home and work addresses.
Privacy experts say that users should be aware when an app is tracking their location – and watch out for unsolicited marketing.
Dr Nathalie Moreno, of law firm Lewis Silkin, said: “It looks like a US business which considers issues from a US law perspective.
“I would be concerned that you might be bombarded with marketing emails from US companies, especially if you have location consent on and go on a trip abroad,” she said.
A spokesman for the app said that it “only collects the data it needs,” and added: “When signing up, the user is provided with the opportunity to opt out of receiving marketing communication.
“This opportunity to opt out was implemented for the UK launch in order to adhere to EU privacy law.”