Lemonade: innovative insurance done right

I recently started using Lemonade as my insurance company for renter’s insurance. It seemed quite interesting and innovative and I was impressed by the whole process of signing up. It’s a hassle-free insurance company with a very transparent business model.

They have an innovative way of structuring the pool. They cap their upside by charging a flat overhead rate on each policy. And any money left behind in the risk pool gets 100% donated. They have no incentive to deny claims as leftover funds in the pool is not a source of income for them. You also get to pick your pool’s cause. My pool is Code to Inspire. If the amount claimed by insured folks in my risk pool is less than the total premiums we all paid into the pool, then the difference will get donated and will be used to teach Afghan girls how to code.

But you never really know how good an insurance company is until you have a claim. Of course, I was never hoping to have to find this out. But some misfortune struck and I had to go through a claim.

The claim process was painless. It’s all done through a chatbot interface, but it was nuanced and human enough that I didn’t mind it at all. It really felt like having a conversation with a friend, as one by one I added the items I was claiming, taking pictures of receipts etc. I didn’t speak to anyone. Instead of a phone call, I was asked to record myself on video describing what happened. Now, I am not sure if a human just saw that video, or if they did a neural network based analysis of my micro-expressions to decide if I was speaking the truth.

Whatever they did, it took a total of 17 absolute hrs from the time I submitted the claim to the time it was approved. I woke up this morning with an email in my inbox that my claim was approved and the funds were already on their way. Here’s the approval email I got, with animated gifs and everything!

I doubt insurance could be made any better!

 

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