Lemonade Insurance is seeking a 43.8% increase in its homeowners insurance rates in New Jersey.
The company announced it has filed an application with the New Jersey Department of Banking Insurance for the increase. Citing changing market costs, the request will translate into an average 45% rate change for homeowners policy and an average 40% change for a condominium policy, according to a memo the insurer sent to policyholders.
The request is subject to review by the regulator and as such, may not be approved for the full amount or may not be approved at all. If, however, the application is approved either in whole or in part, the company said the change will not affect existing policies until they are up for renewal.
“These small adjustments in price helps us keep up with the changing costs in the marketplace – all so we can keep providing the same great insurance for every home we cover,” the company said in the memo.
The effect of the potential rate increase “may vary substantially” depending on the terms of the individual policy and individual circumstances, Lemonade said in the memo.
The artificial intelligence-powered digital insurance company did not immediately respond to a request for comment.
Last year, Lemonade reported narrower losses from 2022. It posted a net loss of $236.9 million in 2023, compared with a loss of $297.8 million a year ago.
Revenue last year also rose to $429.8 million from $256.7 million in 2022. In a letter to shareholders, the company said then that there is hope that the industry’s headwinds in 2022 and 2023 could become tailwinds in 2024 and 2025.
“[I]nflation seems to be receding, new rate approvals are adding up and earnings in, and if the costs of capital come down, we may yet see a moderation in reinsurance costs too,” the company said in its statement announcing the 2023 financial results.
