New renter / homeowner insurance app - Lemonade (NY only for now)

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There is a new insurance startup, so far only available in NY. For my apt, a policy was offered at $5/mo. It didn't seem to provide all of the liability protection that I was expecting, though.

"Insurance, the founders reasoned, suffers from misaligned incentives. Every dollar paid out comes from insurers’ pockets, encouraging poor behaviour. Normally upright people have few qualms about defrauding their insurer (as 25% of Americans do), pushing up premiums. Lemonade’s solution is to take 20% of premiums as a fee and to reward under-claiming customers by giving a share of unused income to a chosen charity. This brings good publicity. But just as important is how different Lemonade looks behind the scenes. Instead of underwriters it uses algorithms; and instead of expensive brokers and salespeople it uses chatbots. It even uses AI and machine-learning to handle claims, a job typically seen as needing a human touch." 

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"We take a flat fee, pay claims super fast, and give back what’s left to causes you care about.*

* Subject to board discretion and the company meeting certain financial standards"

So... in other words, they may or may not decide to donate some of their profits to charity. Not really enticing me to run from my current insurer.

Liability protection up to $500K; deductible ranges from 250-2500.

I priced these folks out, and they came in at nearly 2x my existing coverage, and that's with a lower liability cap ($500k vs. my $1M coverage). I don't know if their risk model is way off, or Travelers' is, but somebody's mispricing the risk I present.

I switched; upping the policy to match my current liability limits increased the price to $7.30 a month; I had been paying $11.75, and this has a $250 deductible vs. $1000 on my old policy, so I'll take it. I was also offered a policy at $5/month with a $100K liability limit.

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