Ted Patestos
// January 26, 2026

(Image credit: Frank Rietzsch/Pixabay.)

A growing number of industries are shifting toward a Netflix-style subscription model for engaging with customers. The approach provides consumers with easy online access to platforms that allow them to personalize products and services to meet their unique needs. From software to nutritional supplements to shaving supplies, shoppers are spending hundreds of billions of dollars annually on subscription-based services.

But as many consumers have found, subscription-based services are not without their issues. Consequently, consumers must carefully consider whether the convenience and customization they gain from shifting to a subscription will outweigh the downsides they may encounter.

One area where those downsides can be especially frustrating is subscription-based insurance.

The Emergence of Netflix-Style Insurance Plans
Following the lead of other industries, the insurance sector has begun offering consumers subscription-based access to policies. These models provide consumers with features familiar from other subscription services, including customization, control, and flexibility. In the words of one nationwide U.S. company now offering subscription-based renters insurance, the approach allows consumers to secure coverage that is “as unique as you.”

With regard to obtaining a policy, the appeal of subscription-based services is easy to understand. Platforms provide a high degree of transparency, allowing consumers to quickly see what they are getting and how much it will cost. Policies can be constructed and reconstructed à la carte, empowering consumers to dial in exactly the coverage they want or can afford.

Subscription-based platforms also enable policyholders to modify their insurance policies on the fly. If a second bedroom suddenly becomes a home office outfitted with costly work technology, coverage can be expanded with a few clicks.

Overall, subscription-based insurance gives policyholders a greater sense of control. They have the information needed to make informed decisions and can implement updates without a time-consuming—and potentially confusing—customer service call.

The Downsides of Subscription-Based Insurance Plans
Consumers are often drawn to subscription-based models because they facilitate “self-service” engagement. Connecting with an agent or salesperson via phone or chat is no longer necessary. The process is designed to be digital-first and self-directed.

But there are times when policyholders want to connect with a customer service representative, sometimes urgently. If they are stuck roadside after a car accident or trying to address apartment damage caused by a burst pipe, speaking with a real person can be reassuring.

Before signing up for a subscription-based service, consumers should explore how quickly they will be able to reach a human agent when they have a claim or other issue. Providing a “self-service” platform allows companies to gain efficiency and boost profitability by reducing customer service staffing, but the trend has led to frustration among digital platform users who need support that is not self-directed.

A self-service approach to insurance can also be problematic for consumers who are not well educated on the type or extent of coverage they require. Even with platform guidance, consumers may lack the knowledge needed to avoid being underinsured or locked into unnecessary coverage.

For example, when choosing coverage limits for homeowners insurance, consumers may base a policy on the market value of their home rather than rebuild cost, which can leave them underinsured in a total-loss scenario. Consumers may also assume that a standard policy covers events that require endorsements, such as floods or earthquakes, again leaving critical gaps.

Potential Problems to Explore Before Purchasing a Policy
Subscription-based platforms streamline the policy-purchase process, which can be a significant advantage. But moving quickly can also cause consumers to overlook issues that become costly over time.

With the customization subscription services provide, features that are standard in traditional policies can become add-ons that drive up costs. If sufficient coverage requires multiple add-ons, the total package may ultimately exceed the price of standard coverage offered by non-subscription models.

Consumers should also explore the steps required to cancel subscription-based services if they decide it is necessary. Widespread frustration led the U.S. Federal Trade Commission to issue a “Click-to-Cancel” rule in 2024, aimed at requiring subscription providers to make cancellations easier. However, the rule was ultimately struck down in court for failing to follow proper rule-making procedures.

Subscription-based platforms have the potential to reshape the insurance industry by creating more efficient processes for both consumers and companies. Their success, however, will depend on meeting consumer needs not only during policy purchase, but also when claims must be made.

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