Lemonade Proposes Open Source Insurance Policy for All to Change, Adopt
Technology-focused homeowners and renters insurer Lemonade Inc. has proposed an open source renters insurance policy that anyone can contribute to changing, even its rivals since Lemonade is not copyrighting it.
The aim is to develop a policy that is written in language that policyholders can understand and one that allows customer to easily change the coverage to what they want.
Lemonade has dubbed its open source project Policy 2.0, and the renters policy is just the first of what it hopes will be a series of open source policies that consumers will understand and other insurers will adopt.
Lemonade Co-Counder Shai Wininger said in prepared remarks that his company believes that “bringing consumers and professionals together in an effort to co-create an insurance policy will result in a better and fairer insurance product for the 21st century.”
The first attempt — “Renters Insurance Policy 2.0” — is less wordy than most policies but still has 2,300 words. The hope is that open source participants will suggest ways to cut it down in size while retaining important information.
Lemonade said this renters policy draft was “created in consultation with state regulators” and it will be submitted for regulatory approval once changes have been incorporated.
In the meantime, Lemonade will continue to offer an industry-standard policy.
Lemonade explains its Policy 2.0 vision in its blog:
“Each Policy 2.0 will be unique and dynamically-generated, based on the choices the user made. While people can print Policy 2.0, it’ll be at its most powerful on a screen. When the policy says that $20,000 of property is covered, for example, our Live Policy technology makes that sentence clickable, so the user can instantly change that to $30,000. If the user wants to add earthquake coverage, to take another example, they can initiate that from within the policy itself, and the policy will morph to include earthquake coverage.”
Anyone can edit the proposed policy via GitHub. It is accessible to all of Lemonade’s competitors to use under the GNU’s Free Documentation License, Lemonade said.
GitHub is a platform for open source technology, essentially allowing anyone to view software. People can comment on it or adopt it. GNU is an operating system and broad collection of computer software, made of free software licensed via the GNU general public license.
Last October, Lemonade invited other businesses and organizations to use its sales platform, following a decision to make its application programming interface or API available to developers of commerce sites, real estate apps, financial advisers, bots, IoT and smart home products. More than 400 businesses applied for early access within the first day of its offer, Lemonade said at the time.
Last December, Lemonade raised $120 million in a Series C financing designed to help it expand globally in 2018. SoftBank led the round, joined by existing investors Aleph, Allianz, General Catalyst, GV (Google Ventures), Sequoia Capital, Sound Ventures, Thrive Capital, Tusk Ventures and XL Innovate.
Lemonade is an insurance company run by artificial intelligence and behavioral economics, with a focus on digitizing the entire insurance process. As a certified B-Corp., its underwriting profits go to nonprofits. The company takes a flat 20 percent fee under the idea that premiums belong to the insured and not the insurer. During its annual Giveback, any unclaimed money is returned, donated to causes customers care about.