Lemonade Stand Opens in California
“Innovative kids to charge only 5 cents a glass…sugar and coverage extra unless a sour experience at claim time is desired”

The California insurance commissioner’s office has issued a press release announcing that Lemonade has been approved to sell insurance in California, citing their innovative use of a phone app to place coverage, along with other innovative business models of “insurtech” start-ups. (I wonder how long it will be before Commissioner Davey Jones’ locker will be full of insurance start-ups?)

I’m curious how a phone app can be used to ask an individual or family about their many exposures to loss and how they can best be insured or managed. Does the new insurance business model consist of an automated cash flow system where possibly the last thing on the minds of the providers is whether or not American families are properly protected from potentially catastrophic exposures to loss?

“InsurTech” can be a misnomer. Often a better moniker is “ManurTech” (or “Bovine Scatology” if we want to recognize the specific variety of manure) when the business model is based on Fast/Easy/Cheap. I wrote about Lemonade’s $5/month renters policy:

Lemonade Premium Unsustainability

And indirectly here:

Passing Fad or Industry Disruption?

Why do so few people challenge the claims of these start-ups? Starting with government regulators charged with the responsibility of protecting consumers.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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