In 3 seconds, a robot just paid the fastest insurance claim in history
With zero paperwork and an honesty pledge, Lemonade is aiming to reinvent the industry.
Brandon Pham wasn't in the best mood. It was a cold weekend and his $979 Canada Goose Langford Parka was just stolen.
Fortunately for Pham, an educator in Brooklyn, he's a customer of an innovative new insurance startup called Lemonade. So at 5:47 PM on a wintry afternoon, his shivering hands opened up the Lemonade app on his phone and he made an instant claim. Pham got paid just three seconds later (it was still 5:47 PM) – making it the fastest paid insurance claim in history. To put that in perspective, it took you longer just to read that sentence. What’s crazier, is that the claim was paid by a Lemonade robot named Jim who was authorized to instantly pay claims to Lemonade customers.
"I was shocked by how easy the process has been with Lemonade," said Pham, whose claim set the record. "I signed up for Lemonade because it was no frills, the most affordable option, and took no more than two minutes on my couch [to sign up]. I try to avoid making claims but the process with Lemonade was so simple."
Lightning fast claims paid by robots named Jim aren't the only thing that makes Lemonade different from other insurance firms. Launched by by three Israeli entrepreneurs this past fall, the company is powered by behavioral economics. Claims are made with an honesty pledge and zero paperwork. What motivates the customers to be truthful is that all leftover money that Lemonade doesn't pay out to customers is donated to charity.
"That changes everything," says Dan Ariely, a Duke University professor and the Chief Behavioral Officer at Lemonade. "It allows you to bring the best side of human nature to the people. The upshot is greater trust. It's a virtuous cycle and that means everyone wins."
In addition to Ariely, the company's other two Israeli co-founders are Daniel Schreiber – the former president of Powermat, a device that can wirelessly charge your smartphone and Shai Wininger, the founder of the popular freelancer site Fiverr.com.
So is Lemonade getting a plaque honoring their world record? Well, not so fast.
"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," said Schreiber. "Yet from all we can gather, in the 3,000 year history of insurance nothing like this has ever happened in 3 seconds. So we're claiming the title. The number to beat is now 3 seconds, and we hope others will rise to the challenge."
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