Vega

FreightTech aims to fill the trucking niche with daily insurance coverage

With annual insurance costs for owner-operators and small fleets ranging from $8,000 to $25,000 or more per truck, being behind the wheel of your own business can be overwhelming.

One solution for carriers facing rising costs could be usage-based insurance, which is available for owner-operators and smaller fleets equipped with ELDs.

While usage-based insurance for trucking companies has been around for several years, Miami-based Lula Trucking aims to simplify usage for owner-operators and small fleets.

“We are a software company that provides technical and software infrastructure to our customers,” Michael Vega-Sanz, co-founder of Lula Trucking, told FreightWaves. “At the same time, we actually have in-house licensed insurance brokers and Lula also owns an insurance agency.”

Michael Vega-Sanz founded Lula Trucking with his twin brother, Matthew. Lula Trucking partners with small fleets or owner-operators with a subscription or membership fee of $250 per month that allows the carrier to file their insurance case. The company launched its service for commercial carriers in February.

Once a carrier is onboarded with Lula, they can use the company’s software and infrastructure to purchase daily insurance starting at $40 to $50 per day, depending on the carrier’s risk profile and other factors.

“No. 1, our technology provides access to carrier-paid per diem insurance,” said Matthew Vega-Sanz. “We also have a digital claims process. We collect all loss information from our customers electronically, then we ship them back to the carrier exactly how and how they want them.

Collecting loss data electronically saves carriers time and possibly money, as “60% or more of claims go unpaid or are completely delayed because the wrong information was submitted for the carrier.” “, said Matthew Vega-Sanz.

Lula Trucking also provides driver verification software that examines risk factors at the individual driver level. The company also provides digital policy administration, which enables real-time access to insurance documents.

“If you’re going to get a loan and you need insurance documents or a freight brokerage, we could speed up that process a lot more than a typical carrier who can leave you hanging for hours, sometimes even a day. , and then all of a sudden, you lose that charge,” Matthew Vega-Sanz said.

Lula’s target customers would be owner-operators or trucking companies with 25 or fewer trucks.

Lula Trucking started in 2016, when the twins were still in college and craving pizza one night. Neither had a car, so they came up with the idea of ​​an app that would let them borrow cars from other students on campus.

As this initial application would eventually die out, Michael and Matthew worked with insurers and underwriters, learning about episodic insurance for motorists.

Besides trucking, Lula operates in several vertical markets, such as car rental and car-sharing companies.

In July, Lula raised $18 million in a Series A led by Founders Fund and Khosla Ventures, with participation from SoftBank, hedge fund manager Bill Ackman and previous investors Florida Funders, Nextview Ventures and Flexport. To date, Lula has raised $23 million from investors.

The concept of episodic insurance reminded the brothers of their upbringing on a small farm in South Florida. The twins’ older brother, Max, maintains a fleet of around 15 semi-trailers. He sometimes uses the rigs to do disaster cleanup with FEMA, Michael Vega-Sanz said.

“I was at Max’s farm one day when I saw a bunch of his trucks sitting around, and I said, ‘Hey Max, are you still paying insurance on those trucks? And Max said yes. “, said Michael Vega-Sanz. “Even though Max hadn’t used these trucks for a few months, if he wanted to make sure he was in compliance with the insurance coverage, he had to pay for it. “

Michael and Matthew believed there had to be a better way for truckers, like only paying for insurance when an owner-operator or small fleet vehicle is actually in use.

“We believe the trucking community is not only underserved, but underappreciated,” said Michael Vega-Sanz.

Watch: FreightWaves Carrier Update for February 15

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