• DTS.USA
    5.320
    -0.013
    -0.2%
  • NTI.USA
    2.800
    0.000
    0%
  • NTID.USA
    2.760
    -0.100
    -3.5%
  • NTIDL.USA
    1.940
    -0.100
    -4.9%
  • OTRI.USA
    6.190
    0.010
    0.2%
  • OTVI.USA
    12,391.500
    -166.900
    -1.3%
  • DTS.USA
    5.320
    -0.013
    -0.2%
  • NTI.USA
    2.800
    0.000
    0%
  • NTID.USA
    2.760
    -0.100
    -3.5%
  • NTIDL.USA
    1.940
    -0.100
    -4.9%
  • OTRI.USA
    6.190
    0.010
    0.2%
  • OTVI.USA
    12,391.500
    -166.900
    -1.3%
NewsTrucking

FreightTech firm aims to fill trucking niche with pay-per-day insurance coverage

Lula Trucking leverages technology to reduce owner-operators,' small fleets' costs

With annual insurance costs for owner-operators and small fleets reaching anywhere from $8,000 to $25,000 or more per truck, being at the wheel of your own operation can be overwhelming.

A solution for transporters facing escalating costs could be usage-based insurance, which is available to owner-operators and small fleets that have ELDs.

While usage-based insurance for trucking companies has been around for several years, Miami-based Lula Trucking aims to make it simpler to take advantage of for owner-operators and small fleets.

“We are a software company that provides technical and software infrastructure for clients,” Michael Vega-Sanz, co-founder of Lula Trucking, told FreightWaves. “At the same time, we actually have licensed insurance brokers in house and Lula actually owns an insurance agency as well.”

Michael Vega-Sanz founded Lula Trucking with his twin brother, Matthew. Lula Trucking partners with small fleets or owner-operators with a $250-a-month subscription or membership fee that gets the carrier its insurance filing. The company launched its service for commercial transporters in February.

Once a carrier is onboarded with Lula, the carrier can use the company’s software and infrastructure to purchase pay-per-day insurance starting in the range of $40 to $50 daily, depending on the carrier’s risk profile and other factors.

“No. 1, our technology provides access for pay-per-day insurance from the carrier,” Matthew Vega-Sanz said. “We also have a digital claims management process. We collect all the information around losses from our customers electronically, and then push that back to the carrier in exactly the way and manner that they want.”

Collecting data around losses electronically saves time and possibly money for carriers, because “60% or more of claims are either not paid out or completely delayed because the wrong information was submitted for the carrier,” Matthew Vega-Sanz said.  

Lula Trucking also provides driver vetting software that examines risk factors at the individual driver level. The company also provides digital policy administration, which allows real-time access to insurance documents.

“If you’re going to get a loan and you need some insurance documents or freight brokerage, we could accelerate that process much more so than a typical carrier that may leave you hanging for hours, sometimes even a day, and then all of a sudden you lose that load,” Matthew Vega-Sanz said. 

Lula’s target customers would be owner-operators, or trucking companies with 25 or fewer trucks.

Lula Trucking began in 2016, while the twins were still in college and craving pizza one night. Neither had a car, so they came up with the idea for an app that would allow them to borrow cars from other students on campus. 

While that initial app would eventually fizzle out, Michael and Matthew worked with insurers and underwriters, learning about episodic insurance for motorists. 

Along with trucking, Lula operates in several verticals markets, such as car rental and car-sharing companies. 

In July, Lula raised $18 million in a series A round led by Founders Fund and Khosla Ventures, with participation from SoftBank, hedge fund manager Bill Ackman, and previous investors Florida Funders, Nextview Ventures and Flexport. To date Lula has raised $23 million from investors.

The concept of episodic insurance reminded the brothers of their upbringing on a small South Florida farm. The twins’ older brother, Max, maintains a fleet of 15 or so tractor-trailers. He sometimes uses the rigs to do disaster cleanup with FEMA, Michael Vega-Sanz said.

“I was at Max’s farm one day when I saw a bunch of his trucks sitting around, and I asked, ‘Hey Max, are you still paying for insurance on these trucks? And Max said yep,” Michael Vega-Sanz said. “Even though Max hadn’t used these trucks in a couple of months, if he wanted to make sure that he was compliant with insurance coverage, he needed to pay for it.”

Michael and Matthew thought there had to be a better way for trucking operators, such as only paying for insurance when an owner-operator’s or small fleet’s vehicles are actually being used. 

“We think the trucking community is not only underserved, but they’re underappreciated,” Michael Vega-Sanz said.

Watch: FreightWaves’ carrier update for Feb. 15

Click for more FreightWaves articles by Noi Mahoney.

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact nmahoney@freightwaves.com