Lemonade Inc. is a new kind of insurance provider. While most
insurers use commercialsto try to convince you that they’re on your side, Lemonde’s whole business is structured around that very idea.
Rather than make money by withholding its service from its customers, Lemonade charges a flat fee and donates extra premiums to a wide range of charities.
Recently, the company launched its auto insurance branch. Using
telematicsto set premium rates, it’s intentionally marketing its car coverage toward safe, low-mileage drivers. It’s also providing discounts to owners of hybrid and electric vehicles.
What is Lemonade insurance?
Founded in 2015, Lemonade is an insurance company based in
New York City. Lemonade recognizes the innate conflict of interest in the traditional insurance business plan—that providers make money by not paying your claims.
So instead, Lemonade sets a flat fee for running its business on top of premiums determined using artificial intelligence and behavioral economics. Any premiums not paid out in claims at the end of the year are given to a charity of your choosing.
The company’s focus on making a difference hasn’t gone unnoticed. In its first few years, it’s drawn a wide range of investors, from Ashton Kutcher’s Sound Ventures to GV (formerly Google Ventures). It’s also one of the only insurance companies to achieve B-Corporation certification.
How does Lemonade car insurance work?
Lemonade is designed for social impact, and Lemonade Car is no different. The company focuses on providing coverage for drivers who want to minimize their environmental impact. The insurer rewards clients who drive less or own hybrids and
Insurance Journalsays Lemonade is also considered an insurtech company, which means it uses advanced technology like artificial intelligence to do its business.
For its auto coverage, Lemonade uses telematics to collect data about its customer’s driving habits and sets discounts based on what it discovers through its smartphone app.
Lemonade also offers discounts to customers who bundle their coverage with their renters, home, life, or pet insurance.
Other insurtech companies
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