Lemonade offers $0 deductibles to customers, refining product with behavioral analytics

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Lemonade, the New York-based insurtech, is adding a Zero Everything option to its core renter's insurance product.

Zero Everything eliminates deductibles for two claims a year, and doesn't hike rates if customers do file a claim. Lemonade customers can add the option to their existing policy immediately using the company's app and its Live Policy capability, which reflects coverage and premium changes in real time.

Yael Wissner-Levy, Lemonade's head of strategic communications, says that the company is continuously refining its products and experience using behavioral economics, Deductibles, she explains, often confuses customers who want to make a small claim, but would receive little to no insurance value for the item. It also encourages people to exaggerate their property's value to hit the deductible.

"It's part of the overarching mission of Lemonade to make insurance something people can really use," Wissner-Levy says. "The behavioral economics is at play in almost all of the process of getting a policy or filing a claim."

Lemonade's typical deductible is $250 on a $5/month policy, Wissner-Levy adds. Customers who elect Zero Deductible will pay a slightly higher premium for the service.

Lemonade is currently live in five states; the most recent of which is Texas. The company is licensed in 19 states and will roll out to them by the end of the year, Wissner-Levy says.

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