Lydia is one of the most popular peer-to-peer payment apps in Europe with 1.5 million users. Think about it as a sort of Venmo or Square Cash for Europe. More recently, the company started offering more options to manage your money with a premium subscription and additional features.
While Lydia doesn’t want to replace your bank and insurance company, the company is offering an insurance product for the first time. Lydia is partnering with its investor CNP Assurances — having an insurance company as an investor has a few advantages.
So here’s what you get. You’re instantly covered against cracked screens, liquid damage and accidental damage. There’s no excess but you’re limited to one claim per year. Phones now cost a small fortune, but you’re limited to €500 ($570) per claim.
Optionally, you can subscribe to a better insurance product for €9.99 per month ($11.39). In addition to phone insurance, your laptop, tablet, Nintendo Switch, Kindle, camera and other electronics are covered. You can make two claims per year and you can get back up to €500 for your phone and €1,800 for other devices. More importantly, you’re also covered against theft.
Many phone carriers sell mobile phone insurance. But they usually cost more than that. In most cases, you also need to subscribe for at least one year. In Lydia’s case, you can cancel your subscription whenever you want in the app.
If that product sounds familiar, it’s because Revolut offers a similar feature with some drawbacks. You can subscribe to mobile phone insurance from Revolut’s mobile app.
Pricing isn’t as straightforward with Revolut as Premium subscribers get a discount. For an iPhone X, the insurance product costs as much as €9.58 per month ($10.92) without a Revolut Premium account, or as little as €6.67 per month ($7.60) if you pay upfront and you have a Revolut Premium account.
It’s a 12-month contract with a €125 excess and no theft protection. You also need to start insuring your phone quickly after buying (within six months) otherwise you aren’t covered. Revolut works with Allianz and Simplesurance for this insurance product.
Lydia may have borrowed the idea from Revolut, but I’m not sure why you’d choose Revolut’s insurance product over Lydia’s product.
It’s interesting to see that fintech companies are creating alternative revenue streams with insurance products. Subscribing to an insurance product is quick and painless as they already manage your money and have your card on file.