Gap Covers were introduced in the early 1980s to help insure assets that experience depreciation. It was initially used by those who purchased a car and found themselves owing more than the car was worth due to depreciation.
With PolkaCover, this concept is now being applied for crypto assets.
The product is a lifesaver in moments where it protects the user when they make an insurance claim and receive a claim amount less than the cost or value of the commodity the user bought. When the Gap Cover is purchased, the user gets paid the gap between the original value and the depreciated value, and hence they do not lose the money.
In the Crypto space, the volatility of crypto assets are very unpredictable. Volatility describes the extent to which an asset’s value fluctuates over time, as seen in the cryptocurrency market. Any commodity can be considered a crypto asset when it is purchased with cryptocurrency.
For instance, if Alex purchases a car with his cryptocurrency worth $40,000 and depreciates by 60% in three years, its current market value would be worth $16,000. In case of an accident, the insurer pays the market value of $16,000 (minus any excess), so the rest $24,000 has to be paid by the user himself. Gap insurance would come into the picture to cover that $24,000 so as the user gets the original amount of the Crypto asset that he lost to buy a brand-new car. This way, gap insurance provides extra protection to the commodity down the line in the crypto space.
PolkaCover will be onboarding crypto protocols that offer GAP covers. Additionally, we will give the community a frictionless insurance marketplace experience incorporating next-generation blockchain technology and tokenized incentives.
PolkaCover is the First DeFi insurance marketplace for the global crypto ecosystem. Our aim is to lower transactional and administrative costs of insurance policies and coverage while providing high-value, cost-effective insurance products for the crypto world.
Our platform will be connecting users with multinational insurance providers for all global insurance products such as crypto-related protection, health, life and travel policies. The platform will include a frictionless insurance marketplace experience that incorporates next-generation blockchain technology and tokenized incentives.