This morning, Lemonade announced it has filed for a license in 46 states and Washington, D.C. in addition to New York, where it was licensed three months ago. Lemonade hopes to become available to 97% of the U.S. population during 2017.

Recent press paints Lemonade’s “new” ideas as groundbreaking. But all Lemonade has done is apply new technology to a 3,000-year-old idea.

More disturbing, however, is Lemonade’s portrayal of the entire property-casualty insurance industry. At best, it’s great public relations; at worst, it’s fraud. Daniel Schreiber, Lemonade CEO, sends the message that the insurance industry is a gaggle of cheats and liars looking for ways to wriggle out of paying for claims.

Lemonade’s usual and customary PR messages include:

• In addition to digitizing the entire insurance process, Lemonade reduces costs through giving. In a reversal of the traditional insurance model, Lemonade treats premiums as if they are still the property of the insured, returning unclaimed money during its annual “Giveback.”
• "It's not our money," Schreiber says. "We repeat that sentence like a mantra, and have it emblazoned on our office walls. We never want to be in conflict with our customers. We never want to make money by denying claims.”
• "Knowing that every dollar denied to you in claims is a dollar more to your insurer, brings out the worst in us all," says Dan Ariely, professor and chief behavioral officer at Lemonade. "So we architected Lemonade to avoid conflicts of interest.”
• By replacing brokers and bureaucracy with bots and machine learning, Lemonade promises zero paperwork and instant everything. And as a certified B-Corp, where underwriting profits go to nonprofits, Lemonade is remaking insurance as a social good, rather than a necessary evil. 

These assertions would be comical—except that insurance consumers believe them. Lemonade is not just catering to the consumer’s belief about insurance, it is creating a belief that insurance companies are the enemy. Lemonade’s PR team is brilliant but deceitful. One point conspicuously absent is that insurance companies are run by people—and those people live next door, in the same neighborhood and in the same town as those whose losses they settle.

Beyond the fact that insurance professionals are people too, consumers forget that insurance policies are contracts between an insurance company and an insurance buyer. Regardless of whether or not Lemonade holds itself out as the white knight and portrays all other insurance carriers as evil, neither party can violate the contract. Every insurance carrier pays what it is required to pay, according to the insurance contract. Likewise, Lemonade is going to pay what is required by the contract—nothing more and nothing less. And if either Lemonade or the dastardly insurance companies try to violate the insurance contract, trouble awaits.

Lemonade also forgets to mention that the app does nothing to help consumers understand insurance. Their smart phone app asks how much “stuff” a consumer has, but not about any special circumstances. Neither does it explain coverage to the buyer—especially the exclusions that require an endorsement to alter the policy. With such “convenience” come gaps in protection, and gaps should make any buyer uneasy. Victims of this system will quickly forget the short time it took to obtain a policy when they are struggling to recover from an uncovered or underfunded loss—which occurs without the help of a professional.

People need people who can explain complicated contracts and concepts. Insurance is complicated, and no method of purchase changes that fact. Lemonade’s app doesn’t explain the intricacies of insurance like a knowledgeable agent would. Knowledgeable and professional people know how to get things done—like finding a place to stay and helping the victim recover. None of that comes from an app.

Oh, and all that talk about charity—the insurance industry was philanthropic long before Lemonade.

Lemonade doesn’t exist to change the insurance industry. It exists to get all the venture capital it can. Once that dries up, Lemonade’s memory will be a sour one.

Chris Boggs is director of the Big “I” Virtual University.