Home Insurance, but With a Philanthropic Twist

Aviv Gadot has lived in three different apartments in New York City but never purchased renters insurance. “I don’t trust the companies,” the software developer says. “I know they’ll do everything in their power to keep my money.” His attitude changed recently after he heard about a startup called Lemonade that began offering homeowners and renters insurance in New York state in September.

Along with an easy-to-use app, the carrier promotes a distinct business model. Lemonade keeps a flat 20 percent of your premium; an additional portion, as much as 40 percent, goes toward reinsurance (in case a catastrophe results in claims that outstrip premiums); the rest is set aside to cover claims. The twist: Whatever’s left over at yearend goes to charities picked by the customers.