New York-based digital lender Better Home & Finance Holding Company launched Better Insurance to allow customers to shop for homeowners insurance through a fully digital platform.
Better Insurance is the latest innovation available through the company’s insurance arm, Better Cover, which partners with more than 20 different insurance providers, according to the firm.
The white-label solution will eliminate redundancy and offer competitive pricing for customers without engaging with insurance agents, Nick Taylor, head of real estate at Better, said in an interview with HousingWire.
“Better Insurance is fully autonomous. Anytime we can eliminate redundancy or create more efficiency in the process, we’re obviously going to create more value for the customer that can be rolled over through more competitive rates,” Taylor said.
He added: “I do think part of this is driven by the changing landscape within the home insurance industry right now, with what’s going on with rates and insurance premiums going up. But ultimately, we think that this is just going to be something that will make it a naturally more convenient process for that home insurance shopper.”
When a buyer applies for home insurance, Better Insurance asks questions about the type of property and estimated home sales price, then the firm provides customers with a preview of insurance options.
“Better Insurance will present them (customers) with a deductible, we’re going to present them with a coverage option,” Taylor said, noting that coverage may fluctuate depending on the homeowner’s needs. “Let’s say they did a remodel on their kitchen and that remodel is something that they want to capture as part of the coverage value of their home insurance. This allows them to set that coverage price a little more independently and lock in the insurance rate that they want to pay.”
Currently available in Arizona, Oregon and Illinois, the solution will be offered in three additional states – Oklahoma, Tennessee and Wisconsin – in December. The goal for Better Insurance is to offer the service to all 50 states by 2024.
Better Insurance was created in collaboration with insurance tech firm Sure and insurance company Toggle.
The digital lender, which debuted on the Nasdaq after a two-year journey in August, originated $900 million in production volume in the second quarter, compared to $800 million in Q1.
Better reported a net loss of $45.5 million in Q2, an improvement from a net loss of $89.9 million the previous quarter.
The lender’s shares were trading for less than $0.50 on Thursday, plummeting from roughly $17 when its special-purpose acquisition company (SPAC) partner Aurora Acquisition Corp. sold the day before the lender went public.
“We try not to look at what the stock price is doing day to day; we try to look at how we are living up to our mission of servicing customers,” Taylor said.
Better ranked as the 62nd largest mortgage lender in the first half of 2023, according to Inside Mortgage Finance.
Noting that market conditions are tough across the industry, Taylor noted Better is “pretty confident” that its improved tech and additional capital will lead the lender to emerge as a “leading digital homeownership company.”
The digital lender’s strategy is to become a mortgage-as-a-service company or a white-label provider of mortgage tech.
“Our company has always tried to focus on how to make homeownership cheaper, faster and easier. I think insurance is just an important pillar of that mission,” Taylor said.
