Lemonade Insurance Company is changing the way insurers pay claims and is setting a new speed record at the same time.
The company, which promises policyholders zero paperwork and almost instantaneous service due to its use of artificial intelligence, has announced that it “set a world record for the speed and ease of paying a claim” when it settled a claim in three seconds with no paperwork involved.
Policyholder Brandon Pharm submitted a claim for a Canada Goose Langford Parka, which was stolen on very cold Saturday night. He had purchased the coat at Saks Fifth Avenue for $979.
By using his Lemonade app and speaking into the camera, he described what had transpired and then hit “submit” for his claim.
Lemonade was able to review the claim, cross reference it with Brandon’s policy, run it through the company’s claims bot, A.I. Jim and 18 anti-fraud algorithms, approve the claim and send instructions for wiring the money to his account to the bank in three seconds.
“Since no international standards exist for the payment of insurance claims, the Guinness Book of World Records was unable to enter Lemonade as the World Record Holder,” explained Daniel Schreiber, CEO and co-founder of Lemonade. “Yet from all we can gather, in the 3,000-year history of insurance, nothing like this has ever happened in three seconds. So we’re claiming the title.”
Pharm said he was “shocked by how easy the process has been with Lemonade. I signed up for Lemonade because it was no frills, the most affordable option (he pays $5 per month for coverage) and took no more than two minutes on my couch.”
Not all claims settle instantly
Lemonade doesn’t settle all claims instantly and some are actually forwarded to a human for further review, but the company says it counts time in milliseconds rather than days or weeks.
Policyholders purchase insurance coverage through an app without any paperwork. Lemonade charges a flat fee and returns any unused money to a variety of causes selected by policyholders in a particular “Giveback” pool. Money is paid on June 20th each year unless a pool has depleted its resources due to claims paid.