Lemonade InsuranceCompany is changing the way insurers pay claims and is settinga new speed record at the same time.
|Zero paperwork
The company, which promises policyholders zero paperwork andalmost instantaneous service due to its use of artificialintelligence, has announced that it "set a world record for thespeed and ease of paying a claim" when it settled a claim inthreeseconds with no paperwork involved.
|Policyholder Brandon Pharm submitted a claim for a Canada GooseLangford Parka, which was stolen on very cold Saturday night. Hehad purchased the coat at Saks Fifth Avenue for $979.
|By using his Lemonade app and speaking into the camera, hedescribed what had transpired and then hit "submit" for hisclaim.
|Lemonade was able to review the claim, cross reference it withBrandon's policy, run it through the company's claims bot, A.I. Jimand 18 anti-fraud algorithms, approve the claim and sendinstructions for wiring the money to his account to the bank inthree seconds.
|"Since no international standards exist for the payment ofinsurance claims, the Guinness Book of World Records was unable toenter Lemonade as the World Record Holder," explained DanielSchreiber, CEO and co-founder of Lemonade. "Yet from all we cangather, in the 3,000-year history of insurance, nothing like thishas ever happened in three seconds. So we're claiming thetitle."
|Pharm said he was "shocked by how easy the process has been withLemonade. I signed up for Lemonade because it was no frills, themost affordable option (he pays $5 per month for coverage) and tookno more than two minutes on my couch."
|Not all claims settle instantly
Lemonade doesn't settle all claims instantly and some areactually forwarded to a human for further review, but the companysays it counts time in milliseconds rather than days or weeks.
|Policyholders purchase insurance coverage through an app withoutany paperwork. Lemonade charges a flat fee and returns any unusedmoney to a variety of causes selected by policyholders in aparticular "Giveback" pool. Money is paid on June 20theach year unless a pool has depleted its resources due to claimspaid.
|Related: Rebel with a cause: Lemonade CEO calls for radicalchange
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Patricia L. Harman
Patricia L. Harman is the editor-in-chief of Claims magazine, a contributing editor to PropertyCasualty360.com, and chairs the annual America's Claims Event (ACE), which focuses on providing claims professionals with cutting-edge education and networking opportunities. She covers auto, property & casualty, workers' compensation, fraud, risk and cybersecurity, and is a frequent speaker at insurance industry events. Contact her at [email protected]
