In today’s fast-paced world, flexibility is becoming a top priority for consumers—and the insurance industry is responding. One of the most innovative trends gaining traction in 2025 is on-demand insurance. Unlike traditional policies that lock you into long-term coverage, on-demand insurance allows you to activate protection only when you need it—by the hour, day, or event. Whether you’re borrowing a car, traveling abroad, or taking on a freelance project, this model gives you control, convenience, and cost-efficiency like never before.
What Is On-Demand Insurance?
On-demand insurance is a short-term, flexible coverage that can be purchased instantly through an app or website. It’s designed for temporary situations where traditional insurance would be excessive, complicated, or unavailable.
You can think of it like streaming a movie instead of buying a DVD. Why pay for a full month or year of coverage when you only need it for a few hours?
This type of insurance is ideal for:
- Renting or borrowing a car for a short time
- Traveling internationally for a few days
- Freelancers who need temporary liability coverage for specific gigs
- Cyclists or scooter riders looking for accident protection during use
- Event organizers or hosts needing short-term liability insurance
How Does It Work?
With just a smartphone, users can access an on-demand insurance platform, select the type of coverage needed, choose a timeframe, and purchase the policy—sometimes in under 60 seconds.
Once activated, coverage begins immediately (or at the scheduled time) and lasts only for the chosen period. Users receive digital proof of insurance, and everything is managed online—no phone calls, paperwork, or long-term commitment.
This model is made possible by InsurTech companies that combine digital platforms, real-time risk assessment, and smart underwriting. Some well-known examples include:
- Trov – offers on-demand insurance for electronics, travel, and auto
- Cuvva – provides short-term car insurance in the UK
- Verifly (now Thimble) – ideal for freelancers and small business coverage
- Lemonade – simplified renters and liability insurance with instant activation
Benefits of On-Demand Insurance
✔ Flexibility
Only pay for what you need, when you need it. Perfect for modern lifestyles, gig workers, and occasional users.
✔ Cost-effective
Because you’re not paying for unused coverage, this model often ends up being cheaper—especially for low-frequency users.
✔ Easy to use
No paperwork, no agents. Everything is managed through a clean, mobile-friendly interface.
✔ Real-time coverage
Start and stop coverage instantly. Adjust duration and type on the go.
✔ Ideal for sharing economy
Whether you’re driving a rideshare car or renting a house on Airbnb, on-demand insurance fits the needs of today’s collaborative services.
Potential Drawbacks
While on-demand insurance is highly convenient, it’s not for everyone or every situation. Some limitations include:
- Limited coverage types: Not all insurance categories offer on-demand options yet.
- Higher rates for frequent use: If you activate coverage often, traditional policies might become more economical.
- Regulatory differences: Availability and legality vary by country or state.
- Lack of bundling: You may miss out on multi-policy discounts offered by traditional insurers.
Who Should Consider It?
On-demand insurance is ideal for:
- Millennials and Gen Z consumers who prioritize digital-first experiences
- Urban dwellers who use bikes, scooters, or car-sharing services
- Freelancers and gig workers who need short-term liability coverage
- Travelers who want temporary protection without a full policy
- Anyone seeking flexibility without long-term commitment
The Future of Insurance Is Flexible
As consumer habits shift toward mobility, independence, and on-demand services, the insurance world is evolving too. In 2025, on-demand insurance is no longer a niche concept—it’s part of a larger transformation that prioritizes convenience, personalization, and efficiency.
For those who value control over cost and coverage, this model offers an exciting, user-friendly alternative to traditional insurance.
Whether you’re renting a car for the weekend or protecting your next freelance gig, on-demand insurance puts the power back in your hands—exactly when you need it.