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I am not sure which forum to put this in, but I will try here and see what response I get.
We are shopping our homeowners insurance (because it keeps going up).
A new company called Lemonade popped up and they are $190/month cheaper than allstate. We have learned over the decades that Insurance is not a "you get what you pay for" business, at least not always. Some companies just charge more. Lemonade also claims that if there are not a lot of claims, they will donate excess funds to certain charities rather than to shareholders. Some of the charities are scammy political news hounds (ACLU for example) but others are real, valid, and meaningful charity organizations that actually exist to help people. that is a neat business model, although it may not be sustainable.
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Anyway I am wondering whether anyone is familiar with this company. I have learned they mostly re-insure the risk, and they are not rated by the big four rating organizations. I am not sure whether this is because they are new, small, or non-standard (they are a public benefit corporation). Anyway, I am digging into the company and their limited history. CD is always a good place to get leads for information.
I am a bit concerned because they use a lot of hip catchphrases which I find to be somewhat unprofessional and they have have a plethora of people contact me all claiming to be in charge of my inquiry into a policy. One of them sent me a rude e-mail about "leaving me hanging" because i did not buy a policy in a day or two. the whole thing seems a bit disorganized and almost childish, but they are new and still getting their act together. Plus they are so much cheaper.
They claim our lender (Quicken) regularly accepts them as the insurer on homes financed by Quicken and I expect Quicken does their homework better than I can. Still I want to know more before I consider switching.
If you are familiar with this company, please let me know what you know.
That seems really, really small. $80 Million in assets? I'd hope their insured properties are really well spread out geographically. If you have an agent that's written a bunch of Policies in suburban Philly (just an example) and they get a bad hailstorm, it could really sting the company.
In addition to the financial ratings I'd be concerned about how good they are to work with. Plenty of companies are extremely healthy financially but an absolute nightmare if you have to file a claim.
I just had some clients that used an online lender and then Lemonade for insurance. My clients were Millenials so they were totally fine with their hip catchphrases and such. I know they liked working with them to get set up. it is a new company so it is hard to know about their service for the long term.
They gave me that, but they are not rated by the four companies that normally rate insurance companies. Moody's, A.M. Best, Fitch and Standard & Poor's. I am accustomed to look at the AM Best ratings for any insurance company to determine whether they are within a reasonable level of financial stability. I asked them why they are only rated by relatively unheard of Demotech and they were not sure. Possibly because they are only 3 years old or possibly because they re-insure most of the risk and do not carry large reserves. Ratings do not tell the whole story, but I want to know the company will still be around if something happens.
I have them as my renter's insurance. I'm not a millenial (I'm technically an Xennial), but their phrasing doesn't bother me. It's just marketing. They're trying to inject some personality into a usually dry industry like insurance.
Since I only use them for renter's, I honestly didn't research their solvency (my policy only covers the contents of my apartment, not any structures, etc). I just bought and went with a different company for my homeowner's because it was recommended to me and I was tired of making decisions lol.
I’m definitely not an authority on the subject but I was told by my agent several years ago that Demotech’s niche is to rate smaller and newer companies. It’s always a bit of a risk. You are betting that the company you select will be there if you need them and they will be able to handle whatever repairs you need.
I am not sure which forum to put this in, but I will try here and see what response I get.
Lemonade also claims that if there are not a lot of claims, they will donate excess funds to certain charities rather than to shareholders. Some of the charities are scammy political news hounds (ACLU for example) but others are real, valid, and meaningful charity organizations that actually exist to help people. that is a neat business model, although it may not be sustainable.
A mutual insurance company will refund excess funds to their policy holders, although I haven’t got one from State Farm in several years (homeowners or automobile).
If a company is irritating you while you are still in the sales phase (when they should be on their very best behavior) I wouldn’t have real high expectations when YOU need something from them.
Who pays homeowners insurance by the month? Why is it so expensive in Michigan?
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