Insurer Takes a (Lemonade) Stand on Gun Ownership

Lemonade, the home and renters’ insurance company that allows customers to buy policies and submit claims via a smartphone app and artificial intelligence, has announced a change to its coverage plans. And at a time when more brands are taking stands, the New York-based company’s decision appears to be far from popular with its announcement that it would cap reimbursement for the damage or theft of any firearms to $2,500.

“If you own more than $2,500-worth of firearms, we recommend trying one of our competitors. They seem to all offer additional coverage. We don’t.” the company’s co-founder Daniel Schreiber said in a blog post earlier this week.

The change in policy did not win the company many fans on MOnday - at least based on the company’s Facebook post explaining this decision. Responses were all over the map, from the usual “commie” and “liberal” comments to F-bombs and screams about the Second Amendment. One user asked why the company would insure guns at all. “$2,500 can buy five Glocks - enough for a massive shooting spree!” that commenter chimed in.

But in fairness to Lemonade, much of the negativity over this policy change devolved into name-calling and strawman arguments. One respondent sarcastically barked, “Congratulations on labeling tens of millions as ‘dangerous,’” when the company said nothing of the kind in its announcements, nor on social media.

Lemonade’s business model aims to disrupt the virtual market by replacing insurance brokers with artificial intelligence and chat bots. The company claims that its relatively low flat fees eliminate the annoying deductibles and rate hikes that have long made consumers leery of the U.S. insurance industry. Theoretically, this means the company’s customers could file a claim for something as small as a set of headphones, or an item more valuable like a gun. Lemonade also differentiates itself by operating in-part as a social enterprise – the company says it donates leftover revenues after claims and operating expenses to various causes.

And many insurance companies, including Allstate, often treat firearms as scheduled personal property –  high-value items like rare coins, jewelry and expensive cameras. Lemonade’s policies did not require such add-ons, but starting this week, any loss of guns can only score a reimbursement of up to $2,500. Hence a few users sniffed at this announcement, arguing it was nothing new. “Most HO [homeowner] policies put a limit on firearms - this is just marketing,” one commenter said on Lemonade’s Facebook page.

Nevertheless, in the fallout after the mass shooting in Las Vegas earlier this month, Lemonade’s founders believed it was up to them to take a stand. The company certainly will lose some customers and prospects – and at the same time, it could very well score others. What this young company’s stance does demonstrate that in today’s political climate, companies will increasingly feel pressured to align one way or another on some of society’s more divisive issues. We have already been experiencing this trend in wake of the violence in Charlottesville this summer, with companies as diverse as Campbell’s Soup Company and Airbnb concluding they had to take action.

The old rules of business dictated that companies had to do everything they could to dodge politics. But the new normal for companies now is that vacillating on an issue is riskier than taking a stand.

Image credit: Vitaly V. Kuzmin/Wiki Commons