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P2P insurer Lemonade wants to make people like insurers

September 26th, 2016  |  News

Insurance is there to help you out in emergency situations. Unfortunately, many people find dealing with their insurer an adversarial experience. Lemonade doesn’t want to be that.

Lemonade is a New York based insurance startup that follows a peer-to-peer business model. It uses money generated from premiums both to cover claims as well as make the world a better place by donating any leftover funds from the premiums to charity. The company will take a flat 20% cut of all premiums off the top, but they won’t have any incentive to reduce payouts to customers as the rest of the cash won’t be there’s anyway.

According to Insurance Business the company also believes this will help reduce insurance fraud as they hope less people will feel inclined to steal from charity. So far the company has partnered with 15 charities for people to choose, but customers can also nominate organizations and causes of their own whether it be a local church or an international effort like UNICEF.

Peer-to-peer insurance faces some obstacles to picking up steam, especially in Canada where regulation could make it tricky for such a company to set up shop. However, Lemonade is demonstrating exactly the forward thinking innovation that will likely spur the insurance industry to evolve into something better for consumers.