Clearcover is the smarter car insurance choice. By redesigning the car insurance experience with modern technology, Clearcover offers better car insurance coverage for less money. Clearcover automates and digitizes traditional processes to create cost savings passed directly along to their customers in the form of lower rates. This simple and successful model helped them triple their policy sales year-over-year and scale rapidly since their launch in California in 2018. Since then, they’ve entered into seven additional states and expanded their partnership footprint. Matt Christopher, Senior Director of Claims; Louis Condon, Program Manager; and Bud Bach, Director of Technology Infrastructure, have all had a hand in supporting Clearcover’s incredible growth and ensuring that complex regulatory requirements are met.
Insurance is a heavily regulated business, and personal car insurance is no exception. “Auto insurance is a regulatory challenge. Each state is different, and there are many different layers for every regulated piece that needs to be accounted for,” says Louis. Accuracy and timeliness of customer policy notices sent by physical mail is critical in meeting regulatory compliance. Clearcover needed an intelligent direct mail solution that matched their appetite for growth and offered the flexibility to stay a few steps ahead of every single regulation. “Lob allowed Clearcover to scale, full stop.”
Eliminating Compliance Challenges with Direct Mail Automation
From the get-go, Clearcover wanted to optimize customer servicing through workflow automation, and scale their market compliance processes. As a full-stack insurance carrier, a managing general agent, and customer servicer, Clearcover is subject to various bodies of law, with complexities that multiply across every state and sales channel.
Even prior to launch, Clearcover knew that states like California required customer notices to go out by mail, while others required the ability for customers to opt out of paperless notices and request to receive notices by mail. These regulatory notices–such as policy cancellations, adverse action letters, lien holder and void notices–call for robust documentation of customer interactions to ensure Clearcover had followed the letter of the law and can provide evidence that it had taken all steps to notify customers before further actions were taken. Since every state has specific regulatory requirements, the failure to pass each state’s Department of Insurance audits can result in fines of up to thousands of dollars, not just on a per state basis but on a per notice basis as well.
The desire to stay focused on its mission than to be saddled with building infrastructure to send mail was what led Clearcover to Lob. “Since California was the first state to require physical mailings, we knew we had to do print and mail. Traditional mailing facilities weren’t the tech-forward solution that we needed,” recalls Louis. With a simple and straightforward API, integrating Lob with their policy and administrative systems was easy. What used to take “a long, arduous, manual print process that took 3-5 minutes per letter suddenly didn’t require any time after the full Lob integration, which was life-saving.”
From Automation to Audit Excellence
Since initially integrating with Lob, Clearcover has rapidly scaled their direct mail volumes as they’ve grown. Their Lob integration is now used to send automated client communications across all teams, including: product, underwriting, servicing, claims, compliance, and legal teams. “At launch, we were manually processing a few hundred compliance letters a month at best, but after full integration, we automatically trigger about 6,000 mail pieces a month which are sent out based on customer actions” said Matt. “We’re also in the process of integrating Lob into the claims system as the next step,” said Bud. “We send very few claim refund checks now, but this number should go up as we automate the sending of checks.”
The improvement in the overall compliance process made it easy to conduct spot checks. Because frequent audits by each state’s Departments of Insurance are serious business, Clearcover’s management will frequently run mock market-to-market conduct exams to ensure that there are robust audit trails, and correct policy notices are being sent out in a timely fashion. “Given that states can fine us thousands of dollars for any time a user error is committed, Lob took the potential for user error out of the equation, which is huge,” said Louis. Lob’s direct mail automation and tracking features in exam audits “helped us decrease liability exposure by at least 50%, which is really important to us.” said Matt.
The strong commitment to transparency and smart scaling are foundational to Clearcover. As initial users of Lob’s self-service plan before growing their usage volume, Matt shares this advice:
Talk to someone from Lob first. Getting everything set up, we didn’t really understand the full suite of capabilities available that Lob provides. Once we engaged with Lob [about our needs], we realized the full extent of tools that we weren’t using that we should’ve used from the start. The time savings we gained, from being able to set it and forget it, is phenomenal.