At some point in life, you’re going to need insurance to protect your house and everything in it.
The only problem? Dealing with insurance companies is something most of us would rather avoid.
The process traditional insurance companies use can be confusing, overwhelming, and time-consuming for new homeowners. These are some of the many issues that new insurance company Lemonade wants to fix.
What is Lemonade?
Lemonade is a licensed insurance carrier that provides homeowner’s and renter’s insurance to residents of New York and renter’s insurance to residents Illinois.
They don’t use brokers, which helps make the insurance and underwriting process faster. Everything is based online, too, which means no forms or paperwork.
The company was founded by seasoned tech entrepreneurs Daniel Scheiber and Shai Wininger in 2015. Wininger founded Fiverr in 2010; Scheiber was a general manager at SanDisk and then president at PowerMat, a wireless charger company.
To date, Lemonade has raised $60 million in funding. The company might be able to credit their unique mission as a fintech insurance company for their capital-raising success.
While there are other peer-to-peer insurance companies out there, Lemonade is the only one that’s fully licensed right now. The others, including Friendsurance and Guevara, operate as independent brokers.
What sets Lemonade apart from other insurance companies
Lemonade’s clean and modern-looking website boasts that they provide “instant everything. Killer prices. Big heart.”
Those aren’t phrases one would normally associate with an insurance company, but Lemonade’s process is dedicated to fulfilling these promises to their customers.
“Instead of making our money from denying claims, as is the norm within the industry,” explains the company’s blog, “we treat your premiums as your money (shocking!), take a flat fee for our services, and return what’s left to a cause of your choosing.”
That flat fee is 20 percent. If there is money left over — because you didn’t file a claim and cash in on your policy — Lemonade donates this at the end of the year to causes like animal health care, homeless services, or employment for veterans.
“Big heart” means charitable donations
When you sign up with Lemonade, the portal will prompt you to choose a cause that you care about. Then you’re matched with other like-minded customers (this is where the “peer-to-peer” part comes in) who chose similar causes.
Together, you make up a group of policyholders. Everyone pays premiums into a pool. Lemonade takes their 20 percent, but the rest goes to pay claims.
If there are leftover funds when each policy period expires, Lemonade gives the money to the charitable cause you indicated when you signed up.
Aside from being an attractive option for people who want to give back, this system can demotivate people from filing false claims. Doing so means taking money away from those in need and the causes customers care about.
No one wants to cheat a good cause out of money — at least, that’s the idea behind Lemonade’s “big heart.”
How Lemonade provides insurance
Lemonade isn’t kidding when they say “killer prices.” Renter’s insurance policies start at $5 per month and homeowner policies start at $25.
The company also designed their process to eliminate the friction most customers experience with traditional insurance companies while signing up, filing claims, receiving payment for claims, and dealing with customer service.
Their entire platform is optimized for mobile use. That helps make communication with Lemonade more convenient than traditional insurance companies that feature call centers and wait times to speak to someone who can resolve a problem or answer a question.
For faster customer service, Lemonade uses helpful chatbots named Jim and Maya who are based on real people in the company. Users can message the bots from their phone instead of making a call.
Users can also use the platform to perform actions like switching from old insurance companies to a new Lemonade account. Normally, this would require a period of back-and-forth with the insurance companies, multiple calls, and physical forms. Lemonade makes it convenient and straightforward.
Know what insurance company is best for you
Right now, Lemonade is only available in New York, but the company has plans to expand to other states.
When it comes to significant financial decisions like getting home insurance, it’s best to do thorough research. In this case, shop around for rates before picking an insurance company. Ask yourself how much coverage you need. How much would it cost to replace your items or repair your home if something happened?
Everyone has different needs and is working with a different budget, and the cost of monthly premiums may be a big deciding factor for choosing a policy. But don’t forget about other aspects of the experience.
All home insurers aim to provide reliable coverage for your house and assets, but how they handle claims and customer service is crucial.
With insurance companies like Lemonade emerging on the market, you can now choose a policy based on other factors, including how you want to communicate with your insurer. Or, in Lemonade’s case, you can have a say in what happens to your money if you don’t file a claim.
Lemonade wants to make the home insurance process easier, less intimidating, and focused on social good instead of corporate profits.
The company’s process and mission aim to take dishonesty, fraud, and bureaucracy out of the equation. Lemonade hopes to accomplish this by remaining transparent about what they do with their customer’s money in a way that traditional insurance companies simply aren’t.
While most people see insurance as a necessary evil, Lemonade might start changing that image.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.53% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|