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Lemonade's insurance services launched across California

Published 11 May 2017

Lemonade, an insurance company driven by artificial intelligence and behavioral economics, has launched its services across California.

Californians can now buy homeowners and renters insurance in seconds at lemonade.com, or through the Lemonade app, and choose a cause to 'Giveback' to.

California marks the third state in Lemonade's nationwide expansion, and puts Lemonade on track to reach the majority of the US population in a matter of months.

"Most Americans view insurance as a necessary evil, rather than a social good. That's something Lemonade is determined to change," said Shai Wininger, president and co-founder, Lemonade. "Expanding to California is a key milestone on Lemonade's journey. The tech capital of the world deserves insurance powered by AI, and the people of California deserve to see insurance underwriting profits funding their nonprofits."

In addition to digitizing the entire insurance process, Lemonade reduces costs and bureaucracy through giving. In a reversal of the traditional insurance model, Lemonade takes a flat 20% fee and treats premiums as belonging to the insured, not the insurer, returning unclaimed money during its annual 'Giveback'. Giveback is a unique feature of Lemonade, where each year leftover money ('underwriting profit') is donated to a cause customers care about.

"The amazing tech and social impact of Lemonade was the reason we joined the company as investors," said Ashton Kutcher, co-founder of Sound Ventures. "I think Californians will find Lemonade's unique combination of value, values and simplicity hard to resist. I know I did."

Giveback funds nonprofits, but benefits everyone. Fraud consumes as much as 38% of all the money in the traditional insurance system, inflating premiums and making the claims process protracted and unpleasant. While the industry shrugs this off as a cost of doing business, behavioral scientists have mapped the underlying drivers, providing Lemonade with a blueprint for building a new kind of insurance carrier. Giveback is a part of the solution, and this groundbreaking program derives from studies by Lemonade's Chief Behavioral Officer, Professor Dan Ariely, and earned Lemonade a B-Corp certification.

Source: Company Press Release