You might ask, what’s the point of Digital Insurance, why the traditional one is not cutting it anymore?

While the regular insurance works, the inefficiency and manual input required from everyone involved is tremendous!

Why spend 2 days processing data to get insured when all of that could be done in the blink of an eye? Or a single swipe on your phone. Further avoiding typical classic insurance issues — slow, biased and expensive.

So, let’s have a look at the processes of regular insurance. And meanwhile, see what we can improve by running a DAO (Decentralized Autonomous Organization) as a Digital Insurance.

How risky are you?

Every time you apply for an insurance you will get assigned to one of many risk categories. As the time goes on and you have no accidents your risk level decreases. This results in lower insurance premiums. But how to measure the risk accurately?

Endless questionnaires and surveys! — How about NO!

The traditional insurance way to know about you is to give you a bunch of sheets filled with questions. Just to get an estimate. Of course, you will have to sign the paper that if you’re providing false information — no insurance coverage. Only after these tedious and monotonous tasks, the risk group can finally be assigned to the insuree. And don’t forget that surveys could provide the false information — intentionally or not. But either way, insurance contract would get voided. And the claim isn’t paid.

However, DAO way makes this whole process fully automated. Digital insurance automatically sets the risk group without any human mistakes as no human is required. This makes the bulletproof system based on mathematical algorithms that assess risks. It takes some super-computing power, but it’s definitely a do-able task.

How much does it cost to insure you?

Once your risk has been calculated you can get an estimate of how much your insurance will cost — annually or monthly.

The old process collects data about individuals and uses it to estimate what it would cost to insure each risk category. What makes the pricing inaccurate is that the data could be from a couple of months to a couple of years old.

Whereas, DAO as Digital Insurance picks up this data from the devices real-time. And can give you the best price available at the moment based on the real life results. The price premium could be lower as well as higher, but the accuracy is on point and the DAO provides the best price equilibrium for both — insuree as well as insurance.

How do you sign up for your insurance?

If the price fits you, you can sign the documents and finally get insured. The contracts have to be signed as a written copy for both parties. Once all the documents are filled out you got insured.

The old way of getting insurance is going to an insurance provider’s office and signing a bunch of documents that you never have time to fully understand. This creates queues and slows the insurance process altogether.

But wait, insurance no longer has to be signed by hand — smart contracts are here to take over the ancient pen and paper. Getting your insurance is as easy as downloading an app — as soon as you get the application you automatically get to accept the policy. Smart contracts allow this and we’re extremely excited about all the possibilities.

How do you know if there is any damage?

Seems easy enough, so far, right?

Well in the case of any damage the real traditional insurance struggles begin. Currently, no matter what happens, if you’re eligible for a claim or not — you will have to contact your insurance provider. This then causes another delay in the claim reaching your bank account. Not everyone is available instantly to report the accident.

Finally, damage assessments are still done manually by hand with often just visually examining the damaged item — which requires another set of intermediaries for unbiased opinions.

What if you don’t agree with the damage evaluation? Only the court will help you. This could take years and most just agree with the lower claim.

How can you explain if something’s damaged when you don’t know how to calculate the damage?

But what if, when you don’t know even if something is wrong with your device your insurance would know well before you? And on top of that, they would know how much damage was caused and how much would it cost you to fix it.

All of that is possible in DAO as Digital Insurance with an ability to track IoT devices health.

And to remove any benefit of the doubt — whether you’re legible for a claim or not — smart contract automatically executes your claim and process it further onto the blockchain.

How do you get your insurance claim?

In traditional insurance, once you’ve been processed through the damage assessment by unbiased experts and offered with a smaller claim than you anticipated. It’s time to receive your claim.

And then another delay hits you.

These claims are still processed manually. Someone has to sit down and send you the correct amount to your bank account. Since, insurance is dealing not only with you but with hundreds if not thousands of customers this usually takes at least several weeks once the damage was confirmed.

On DAO insurance, the payouts are instant. The insurance provider adds his investment and it instantly becomes claimable. Since there is no delay due to reserve-to-be-met — this makes a payments instant.

If that is not enough to convince you, my guess, you recently invested in a traditional insurance. To be real with you, the time has come to end this archaic process and progress further. Just like we moved from painting cows on the cave walls to Mona Lisas.

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