The traditional model, where consumers sign an annual contract and pay fixed monthly premiums, is now being challenged by a more flexible and digital approach: on-demand insurance.

In this article, we’ll explain how on-demand insurance works, when it makes sense, its pros and cons, and what to consider before signing up.

What is on-demand insurance?

As the name suggests, on-demand insurance is activated only when needed. The consumer can purchase specific coverage for a set period of time.

This could be for a few days or even hours, with activation and cancellation done directly via smartphone or computer.

This flexibility appeals to many, especially younger people, freelancers, and digital nomads.

How does it work in practice?

You download the app or access the insurer’s platform and choose the type of coverage you need, such as:

• Electronics, travel, car rentals, bikes, events, and even pets.

You select the coverage period and pay online. In many cases, the policy becomes active almost instantly.

When does on-demand insurance make sense?

Here are the main situations where using on-demand insurance might be a smart move:

• Short or one-off trips: Only need insurance for a weekend camping trip or a quick flight? Getting coverage just for those days can be cheaper than paying for an annual travel insurance policy.
• Freelancers and gig workers: Independent professionals who take on occasional jobs — like photographers, delivery drivers, or maintenance technicians — can activate liability insurance only on workdays.
• Occasional use of expensive gear: Using your DSLR camera for a specific event? Or your drone for a film shoot? With on-demand insurance, you can protect your gear only during the time it’s in use.
• Car rentals or car sharing: If you use apps like Turo, Zipcar, or Getaround, you can get temporary coverage just for the time you’re using the vehicle, without needing a full annual policy.
• Events and leisure activities: For things like urban cycling, extreme sports, or attending large events, on-demand insurance can offer quick and affordable protection.

What are the advantages?

The main advantage is total flexibility: you decide when and for how long you want to be covered. At the same time, what you pay is also flexible and reflects the coverage period.

The entire process happens online — no need to visit agencies, speak with brokers, or fill out paperwork — making it much quicker and more immediate.

Many platforms also allow you to customize your policy based on your specific needs, such as coverage amount, deductibles, and scope of protection.

What are the downsides?

Despite all the benefits, on-demand insurance isn’t for everyone and does have some limitations.

The level of protection isn’t always equal to a traditional policy — on-demand plans often come with lower coverage limits and more restrictions.

If you need continuous coverage (like daily use auto insurance), it may be more cost-effective to purchase a discounted annual policy.

Also, the on-demand market is still growing, so options might be limited depending on your needs.

Since coverage must be activated manually, you need to stay alert to make sure you’re protected at the right times — which requires discipline.

Does on-demand insurance replace traditional insurance?

It depends. For many people, on-demand insurance is a complement, not a replacement.

For example, someone who already has homeowners insurance might use on-demand coverage to protect specific items during a trip or special event.

For others — especially those without fixed assets or with independent lifestyles — the on-demand model may meet their daily needs perfectly, without the burden of long-term contracts and monthly payments.

Is it worth it for you?

Ask yourself:

• How often do you truly need insurance?
• Are you willing to manage your policies actively, turning them on and off as needed?
• Is the pay-per-use cost better than ongoing coverage?
• Does on-demand insurance offer the protection your lifestyle requires?

If you have a flexible routine, value digital autonomy, and want more control over your spending, on-demand insurance could be a great fit.

But if you’re looking for stability and broader coverage and don’t want to worry about activating policies all the time, the traditional model may still be the better choice.