Participated · Series A · Oct 2020

Goodcover is an insurtech startup that aims to charge premiums that more closely match actual risk using its own machine learning underwriting algorithm and to return unused premiums to policyholders. The company operates as a managing general agent, writing policies, setting pricing and building its risk model while partnering with insurance carriers to hold backend capital. Goodcover launched out of Y Combinator in February and at launch was operational in California. The startup paid its first dividend this year, amounting to 1.89% of premiums paid. The team is currently five people, plans to hire, and says it is growing 30% month-over-month and on track to reach 10,000 members by early next year. With the new funding the company plans to expand into more states in 2021. Goodcover sells renters insurance in California using a member-focused model that returns unclaimed premiums to policyholders. The company operates as a managing general agent, setting pricing and building its own risk models while partnering with carriers to hold capital and write policies. Goodcover takes a 20% cut up front; the remaining 80% goes to partners (primarily for indemnity, loss adjustment, carrier fees and reinsurance). The startup says leftover premiums passed back to policyholders are expected to range from about 5% to 10% and claims it saves renters roughly 45% on their insurance. Founders emphasize using technology to reduce acquisition costs and underwriting friction by eliminating paperwork and agents. The company launched in California and plans to expand to other states over time and is interested in introducing homeowners insurance, though state-level regulation may slow rollout.