Recent articles, even insurance industry articles, paint Lemonade’s “new” ideas as ground-breaking. In fact, their “new” idea is about 3,000 years old; all Lemonade has done is apply new technology to a very old idea. More disturbing is Lemonade’s portrayal of the entire property and casualty insurance industry. At best it is just great PR, at worst it’s fraud. Lemonade CEO Daniel Schreiber’s entire “message,” if you want to call it a message, is that the insurance industry is a gaggle of cheats and liars – looking for ways to NOT pay a claim. Here are examples of Lemonade’s usual and customary PR: These assertions would be comical except that insurance consumers believe them. Lemonade is not just catering to the consumer’s belief about insurance, they are CREATING a belief – that insurance companies are the enemy. Lemonade’s PR team is brilliant, but incredibly deceitful. One point conspicuously absent is that insurance companies are run by people – and those people live next door to, in the same neighborhood with and in the same town as those whose losses they settle. And no person is looking to cheat his or her neighbor. Beyond the fact that those who work for the insurance industry are the buyer's client’s neighbors is that insurance policies are contracts between the insurance company and the insurance buyer. Regardless whether Lemonade holds itself out as the white knight and portrays all other insurance carriers as the spawn of Satan himself, neither party can violate the contract. Every insurance carrier pays what they are required to pay - according to the insurance contract. Likewise, Lemonade is going to pay what is required by the contract – nothing more and nothing less. And if either Lemonade or the dastardly insurance companies try to violate the insurance contract (less than is required by the contract or more than is required by the contract), much trouble awaits. Our hero, Lemonade, also forgets to mention that the app does NOTHING to help consumers understand insurance. Their smart phone app asks how much “stuff” (actual term used) you have, but the buyer isn’t asked about any special circumstances to which they may be subject. Neither does the app go so far to explain coverage to the buyer – especially the policy exclusions that require the policy be altered by an endorsement. With such “ease” comes gaps in protection; and gaps should make the buyer very uneasy. Victims of this system will quickly forget the short time it took to obtain a policy when they are struggling to recover from an uncovered or underfunded loss – which occurs without the help of a professional. People need people (sounds like a song) who are knowledgeable to explain complicated contracts and concepts. Insurance is complicated, and no method of purchase changes that fact. Lemonade’s app doesn’t explain the intricacies of insurance like a knowledgeable agent. Knowledgeable and professional people – you know the ones Lemonade claims are out to get you – are needed after a loss. They know how to get things done - like finding a place to stay, helping with recovery efforts and helping the victim recover. None of that comes from an app. Oh, and all that talk about charity – take a look at what the people in the insurance industry do: https://www.iicf.org/. Lemonade doesn’t exist to change the insurance industry, it exists to get all the venture capital it can. Once that dries up, Lemonade’s memory will be a sour one.
Insurtech start-up Lemonade’s portrayal of the property and casualty insurance industry as a "gaggle of cheats and liars looking for ways to not pay a claim" is at best "great PR, at worst it’s fraud", according to NOTHING of the Independent Insurance Agents and Brokers of America. He also criticised Lemonade for not helping customers understand insurance, and argued it could lead to gaps in protection. "Lemonade doesn’t exist to change the insurance industry, it exists to get all the venture capital it can", he said. "Once that dries up, Lemonade’s memory will be a sour one."