Artificial Intelligence is getting into the insurance business.

This week a new tech-based insurance company at the forefront of the new industry expanded to Nevada, its seventh state since it launched in fall of 2016.

"Lemonade" is a "tech company in the insurance business," its founders say, not the other way around. And their goal is reinventing the way the system for homeowner's and renter's insurance works.

"What we are trying to do at Lemonade is to transform insurance from a necessary evil into this social good," Lemonade Head of Content and Communications, Yael Wissner-Levy, said.

The idea is that when people purchase insurance through Lemonade, the company keeps a flat rate, and the rest of the premium goes into a pool. Customers pull from that pool to get their claims paid.

"We don't see that money as our money," Wissner-Levy said. "It's your money that you are giving us to have for a rainy day. We take a flat fee so we are never in conflict when we have to pay a claim."

The conflict Wissner-Levy is referring to is the traditional insurance company's business model of paying out as little as possible on a claim. She said since their flat rate stays the same regardless of claims paid out, there's no incentive to hold money back.

If, at the end of a year, there's money left in the pool, Lemonade will donate a portion (up to 40 percent) to a charity of the customer's choice. If the pool gets drained, the company has its own reinsurance to cover the claims. Wissner-Levy said the company's founders based the business model on behavioral economics; the idea that more ownership in a company and more say in where the money goes, especially to charity, decreases overstated or fraudulent claims.

"You have no incentive to lie or to embellish a claim," Wissner-Levy said, "and you're actually going to think twice before making a claim at all."

Lemonade uses artificial intelligence and an app rather than insurance agents, which cuts down on operating costs, and also speeds up claims. Wissner-Levy said the process from filing a claim to seeing money in your account takes just seconds.

"The power of technology is exponential, and it really makes all the red tape around the insurance invisible," she said.

This tech-based, "peer-to-peer" method comes as no surprise to traditional insurance professionals. Nevada Division of Insurance Chief Insurance Examiner Rajat Jain called it "a creative approach."

"I have no doubt in the coming years we will see similar products come up, and pop up in pretty much every aspect of our life," Jain said. "They are different from your traditional products. The concept is nothing new, but with a new spin because of the availability of data and technology."

However, Jain urges all insurance customers to double check that the insurer is licensed in Nevada, and to understand the policy completely.

For more information about Lemonade, click here.

For help from the Nevada Division of Insurance on purchasing a policy, click here.