About two years ago, Charles Merritt and Jay Paul, both singletrack cyclists, river runners, skiers, snowboarders, and adventure racers who live in Richmond, Virginia, noticed a problem among their friends and other sports enthusiasts: high deductibles and limiting health-insurance policies meant that a broken bone often broke the bank.
“We have dozens of stories about ourselves, friends, and others who’ve been injured pursuing their outdoor passions,” says Paul, 58, who has worked in the insurance industry for more than 25 years. “I personally have been to the emergency room four times through the years for everything from broken ribs and a broken shoulder to lacerations.”
Then Paul and Merritt started seeing GoFundMe campaigns for injured active friends who couldn’t pay their medical bills. “After contributing to GoFundMe after GoFundMe for friends, we decided that we could do something about it,” says Merritt, 34, a financial technology marketing specialist who started his career at Kayak, helped launch Jetsetter, and later consulted for insurance giant Allianz Global Assistance.
The last ten years of health care and health-insurance policies have opened up huge financial risk for outdoor enthusiasts. “In general, insurance is opaque,” Merritt says. “The cost of care is always increasing, and the 2010 Affordable Care Act has caused health insurers to shift more of it to the individual.”
So Paul and Merritt teamed up with computer-programming expert David Vogeleer, 39, to develop a radical new concept for people with an active life: on-demand accident insurance that is efficient, affordable, and user-friendly, rebooting the insurance process much the way Uber rebooted taxis. In October 2018, they launched their company and named it Buddy.
“Just as breakthroughs in materials science have enabled us to have faster, lighter gear, the revolution in insurance technology allows for us to create new types of coverage to better protect adventurous lives,” says Merritt, Buddy’s CEO. “We’re starting to see the first wave of how risk will be managed in the era of on-demand everything, and getting what you need when you need it will enable adventurers and active people to choose when and where they add a layer of protection.”
Buddy’s coverage is episodic, and you can tailor it to your needs. You can buy it on your phone or laptop 24/7 at Buddy’s website in as little as 90 seconds, from virtually anywhere with cell service, including the base of the mountain you’re about to climb or the bank of a river you’re about to run. The policy, backed by Lloyd’s of London and others, is e-mailed to you instantaneously. It costs less than $10 for a day (slightly more if you need the competition rider). Or you can scale it up. A week costs $21, a month $50. You can also buy a family policy. Buddy covers most adventure sports—from climbing and skiing to road and mountain biking—and it doesn’t ask what sport you plan to do. (While Buddy hopes to expand what activities and adventures it covers, it does exclude a number of more extreme sports, which Merritt describes as activities where you are “not attached to the earth and falling from high heights,” like BASE jumping, big-wave surfing, parachuting, free soloing, wingsuit jumping, and a few others.)
Buddy covers you for the amount of time you sign up for, no matter how many activities you engage in during that time (as long as they aren’t on the excluded list), whether you’re taking part in the sport or heading home and slip on a patch of ice. And you don’t have to worry about being rejected: with Buddy, you are “guaranteed issue,” which in insurance lingo means there’s no underwriting and there are no tests, so you can’t be denied coverage.
Buddy’s benefit payouts include cash for ambulance rides—up to $5,000 for an airlift or $250 for the road—as well as $500 for an urgent-care visit and $1,000 for the ER (for injuries like sprains and minor broken bones), $1,000 a day for a hospital stay (for up to ten days), $5,000 for a break or an ACL tear requiring surgery, and $10,000 for serious burns or a dislocated or broken hip. A more gruesome list of injury awards ranges from $25,000 for the loss of a hand or foot or eyesight in one eye to $50,000 for quadriplegia, severe brain damage, or death. Physical therapy is compensated at $75 a day for up to ten visits.
The company’s business model relies on frequent usage. The average person Buddy targets takes 77 outings a year.
Meanwhile, other companies with similar approaches are hitting the market. There’s Spot, which currently offers life insurance geared to the adventurous starting at $7 a day for a policy and is expanding to offer accident insurance in July, and Trov, which covers gear, like bikes and skis, on a sliding scale that starts at less than $1 a day.
“If you engage in many outdoor pursuits, bad things can happen, and it can be expensive,” says Paul, Buddy’s head of business development, who in 2013 was named Insurance Marketing Innovator of the Year by National Underwriter Magazine for pioneering another bold accident insurance: Balance for Cyclists, which pays lump sums to cyclists injured while riding. “Balance was my first effort at creating new innovative insurance coverages,” he says. “After we built that, I knew we could design one for all outdoor enthusiasts, not just cyclists.”
Buddy’s coverage is not coordinated with health insurance, and you can do whatever you want with the money, which you receive regardless of other coverage you may have. That means your benefits can be used for any out-of-pocket expenses you’ve incurred, like replacing damaged gear, changing travel plans, covering missed work or your health-insurance deductible, or helping with childcare.
“I do a lot of solo bikepacking,” says Bill Ward, a retired financial professional who lives in Buena Vista, Colorado. “I like to have insurance. On my most recent use of Buddy, I was going on an all-day, 50-mile ride up into the mountains. My insurance isn’t that great. Buddy fills in the gaps and gives me peace of mind when I’m out in the middle of nowhere. When I was younger, I didn’t think of it, but now I wear a Road ID bracelet with emergency contact information and carry a Garmin inReach. Insurance like Buddy is the perfect complement to all that.”
From the start, Buddy has won insurance and tech-world kudos, incubator awards, and partnerships. It was accepted into the two most prestigious insurance-tech accelerator programs in the country. The only bump in the road has been how slow the insurance industry and its regulators can be.
Each of the 50 states has its own insurance standards, so Buddy has to apply separately to regulators in each one. Fortunately, Buddy’s paperwork is solid, with pricing and benefits based on sports-injury data from the CDC and reports from institutions like the Outdoor Foundation, and it’s crunched by actuaries in the U.S. and at Lloyd’s of London.
So far, Arizona, Colorado, Kentucky, North Carolina, Ohio, Tennessee, and Texas have given the thumbs-up and are the only states in which you can currently purchase a Buddy policy if you’re a resident. Once purchased, the policy covers you wherever you plan to adventure, whether it’s your backyard, across the U.S., or internationally. Buddy expects to be available to purchase in at least 45 states by fall.
In the states where it’s approved, Buddy has partnered with regional and national outdoor associations, event promoters, and sports organizations. The American Canoe Association, the Mountain Bike Association of Arizona, Bicycle Colorado, the Colorado Mountain Bike Association, the Colorado Mountain Club, and Xterra adventure races are all early adopters.
“Our mission at Bicycle Colorado is to get more people riding bikes,” says Jack Todd, the organization’s communications and policy manager. “Buddy helps by making people feel safe while riding. Our missions are mutually beneficial. Buddy will help us get some more of those people who aren’t riding today, riding tomorrow.”
It seems to be catching on. Since launching, Buddy has covered more than 8,000 days of adventure.
“Our goal is to help outdoor enthusiasts live their lives more fearlessly,” says Paul.
“Our on-demand accident insurance does that by giving people a fast and light way to protect from the maybes,” adds Merritt. “We all know the feeling of maybe or what-if when we’re about to take on something big. Those doubts can cause us to second-guess the commitment to a jump or take our minds off our foot placement just long enough to cause a mishap.”
User testimonials on Buddy’s website validate this. “I definitely felt more free to send it!” Noah Moore, an Air Force master sergeant, wrote after a ride on the trails of Mingus Mountain, in the Black Hills of central Arizona. “I knew it was going to be gnarly; it was the next level of awesome I was looking for.” Worried about his carbon bike, Moore signed up for a day of Buddy coverage but still rode cautiously on the first run “to protect my investment.”
On the second run, his crew wanted to go faster. “I was, like, ‘Hell, yeah.’ There were features I avoided the first time that I really wanted to do. The second time I hit them. I don’t think I would have if I didn’t have the insurance. I don’t think I’ll ever ride a serious downhill again without it.”