Car insurance does come across as one of the more obvious applications of the sharing economy model that has taken so many industries by storm.  It’s a little bit peculiar therefore that there haven’t been many disruptive entrants into the market, although perhaps that says more about the difficulties of entering the industry and the conservative nature of incumbents than anything else.

It does make a natural fit however, as traditionally insurance premiums are determined by your risk profile, which in turn is determined by the behaviour of people that share characteristics with you.  Young drivers for instance tend to get lumped in with other young drivers, with hefty premiums to boot.

Guevara want to do things in a slightly smarter way however.  They’re a UK based start-up that want to offer car insurance based upon your specified peer group rather than a random bunch of people who share certain traits with you.

When you sign up for the service you have two options.  The first allows you to create a dedicated group for people you know or trust.  These could be friends, acquaintances, maybe even colleagues.  The second option is the more traditional approach, whereby Guevara will provide you with a quote based upon your profile and likeness with fellow customers.

The interesting thing is that even if you select the second option, you are placed within a much smaller group of motorists than is common in the industry.  Each member of the group places their premium into the collective pot, and if there is any money left after claims have been made throughout the year, that sum is subtracted from the premiums of each group member the following year.  The company suggest that a sustained period of safe driving could cut premiums by up to 80%.

“The safer the group drives, the less they claim, the more they save … you pay based on your actions rather than statistics. You could call it carmunism,” company founder Kim Miller said recently.

What’s more, the group have various features available to allow them to act as a community of motorists.  For instance, there are discussion forums to allow members to message one another, whilst there is also the capability for members to eject those that are threatening the low premiums enjoyed by the rest of the group.  Those members are then assisted by Guevara in finding a new group that is more suitable for them.

There is also a mobile app that accompanies the site, which users can use to do things such as record details of any incidents from the scene of the accident.

Initial reports suggest that premiums are competitive with rivals in the marketplace, and early estimates suggest that the site has already received a substantial number of customers in its first few weeks in operation.

What’s more, the company also won Wired Money’s startup pitch competition earlier this month, and you can see Miller’s acceptance speech at the event below.