The Capital-Light Way to Start an Insurance Business

Cover lets customers photograph items they want to insure, including homes, cars, pets, jewelry, and electronics. Saroya says computer vision catalogs home contents and gives customers evidence of what they owned, which can help underwriting and make claims easier. He describes the camera as a tool for simpler mobile onboarding, not the whole business.

After studying finance at MIT and working in Oliver Wyman’s financial services practice, Saroya wanted to build products rather than advise businesses. He and his aunt first tried a body-scanning startup, then built Stylekick, a fashion discovery app that reached 400,000 active users but earned too little affiliate revenue to grow sustainably. After joining Shopify and building mobile products, the team chose insurance, where a California auto policy could generate $200 to $300 in distribution revenue and thousands of dollars in lifetime value.

Cover began as a simple app that let people request insurance by photographing an item, before the team had licenses or insurance distribution experience. The app reached the top of Canada’s insurance rankings on its second day, and the team saw a request arrive every 60 seconds. Saroya says Cover raised $3.2 million and built a brokerage operating in 49 states with 30 carriers in under 12 months, while initially avoiding underwriting risk and the capital reserves it requires.

Cover acquired customers through app store search, paid channels, and early success with app store optimization. Saroya describes free services that help people before they buy, including alerts when violations fall off a driving record and access to defensive driving courses that may qualify customers for discounts. Customer requests and insurance rate filings helped the team identify which services to build.

Saroya says Cover’s aim is to make insurance easier to obtain, price it fairly, and help customers when they make claims. His advice to YC founders is to choose a key metric, focus on growing it, and avoid hiring or activities that do not support revenue or that metric. He describes YC as a short sprint that can quickly reveal whether a startup has product-market fit or accelerate a company that does.