Home and renters insurance doesn’t need to be complicated. With all you have going on the last thing you need is an insurance policy that feels like work. This is where Lemonade shines, offering affordable, easy-to-manage homeowners and renters insurance.
A relative newcomer onto the scene, Lemonade has become a serious contender within the home insurance space—add in exceptional renters policies and it’s easy to see why the company has quickly become one of our top picks of 2020.
What is Lemonade insurance?
With plans starting at just $5 a month, Lemonade insurance is making insurance coverage affordable and accessible for every renter and homeowner. The high-tech business model uses a mobile app and artificial intelligence to help you build your plan, file claims and get paid fast. Unlike traditional insurance companies that can take months to pay your claim, Lemonade can pay you in as little as three minutes.
As a certified B Corporation, Lemonade is a great choice for new homeowners looking to save some cash.
Lemonade renters insurance is also ideal for younger consumers looking for basic insurance on their terms. The low cost means Lemonade renters insurance will fall into most renters’ price range and the ease of using the company’s digital resources makes Lemonade an excellent choice for younger generations.
How does Lemonade work?
Lemonade is a peer-to-peer insurance provider. This means that when policyholders pay their premiums, those premiums go into a collective pool. Lemonade uses money from that pool to pay claims for policyholders who suffer covered losses. Lemonade also takes a flat fee off each premium to cover salaries, business costs and technology updates. If the cost of claims exceeds the premiums paid by policyholders, reinsurance is used to cover those claims (so you don’t have to worry about unexpected fees).
But since there’s no way to predict the number and cost of claims in a given year, policyholders may pay more than what’s needed to cover the claims. Unlike traditional insurance companies who take that leftover money as profits, Lemonade donates that money to charities and causes of your choice. This is called their Giveback program. When you sign up for a Lemonade insurance policy, you’re able to select a nonprofit you care about and once a year the insurance company will give back unclaimed money to that cause. In 2019, they gave over $600,000 to nonprofits.
Lemonade coverage types
Renters can protect their items up to the total value of their choice. Standard renters insurance policies cover the cost of lost or damaged items in a variety of situations, including:
- Environmental catastrophes like lightning, windstorm, hail, smoke and freezing (hurricanes and earthquakes are not included)
Renters can also add extra coverage for high-value items like fine jewelry, electronics, bikes, musical instruments and more (some extra coverage items might need a value assessment or other proof of purchase). These items can be added to most insurance policies for an additional cost right from the Lemonade app. This coverage also covers theft outside the home (like if your laptop gets stolen at the coffee shop).
Lemonade’s renters insurance stands apart by offering the “zero everything” feature, allowing renters to do away with deductibles for a higher premium. This feature is perfect for people who need to file claims to replace less expensive times.
Standard coverage includes:
- Your home (the cost of reconstruction is estimated by Lemonade’s experts)
- Other structures on your property (your driveway, fence, shed, etc.)
- Personal property (the total value of your electronics, clothing, furniture, etc.)
- Personal liability (if someone gets hurt on your property and takes legal action)
- Loss of use (if your place becomes unlivable, Lemonade will cover a hotel or rental home and living expenses)
- Medical payments to others (if a guest or neighbor is injured on your property)
The company’s home insurance claims are unique in that the process can be completed in minutes over the app without ever speaking to a human. Lemonade’s app-based homeowners insurance is perfect for people who want simple, basic home coverage.
As you start shopping for home insurance, compare Lemonade’s offerings and rates to our list of the best homeowners insurance companies of 2020.
Standard coverage (called an HO6 policy) includes:
- Your unit
- Personal property
- Loss of use
- Personal liability
- Medical payments to others (under $5,000)
Lemonade is different from many insurers due to offering condo insurance and co-op insurance as separate products. Their condo insurance works well for people who want complete “walls-in” coverage at a price lower than many other insurers. “Walls-in” coverage just means that everything within the walls of your condo is insured in case of a qualifying event, including the walls themselves and everything within them.
Co-op owners are in luck, because Lemonade is one of the few companies who offers insurance specifically for you. Co-op insurance protects you, your property and your possessions, but not the rest of the building, common areas or grounds.
Like condo insurance, co-op covers:
- Your unit on the property
- Your personal property
- Loss of use
- Personal liability
- Medical payments to others (under $5,000)
Lemonade also offers a Zero Everything policy for condo and co-op owners in California, Texas, Nevada and Illinois, which means policyholders can get stolen or damaged possessions replaced without paying a deductible.
Plus, Lemonade insurance automatically covers all your family members (for free!), as well as your landlord if your rental agreement requires you to add them.
Earthquake insurance is currently available in Arkansas and California and will be added to more states soon.
Where is Lemonade insurance available?
Lemonade homeowners insurance is only available in about half of the U.S. It is also an online-based company that provides stellar online service, but you will not be able to visit any brick-and-mortar locations for in-person customer service.
Right now, Lemonade offers some form of home, condo or renters insurance in:
- New Jersey
- New Mexico
- New York
- Rhode Island
- Washington D.C.
It is worth noting that while homeowners insurance is offered in almost all of the states listed above, Lemonade only offers condo and renters insurance in Rhode Island (not homeowners insurance). Additionally, Lemonade offers only renters insurance in Arkansas and New Mexico. However, they do stipulate that homeowners and condo insurance is coming soon to these two states.
In addition, Lemonade will soon be offering insurance policies in:
- New Hampshire
- North Carolina
- North Dakota
- South Carolina
- South Dakota
- West Virginia
The cost of Lemonade depends on a variety of factors, including the value of your property, where it’s located, the insurance deductible you choose and the extra items you choose to cover.
Lemonade prides itself on offering affordable rates, with renters coverage starting at $5 a month and homeowners coverage starting at $25 a month. The company states that the average cost for renter’s insurance is $15.50 per month, but it can vary quite a bit. One of the largest factors affecting price is the limits of coverage that are chosen by the policyholder—the higher the limit, the more expensive the policy will be.
For a $395,000 home in Austin, Texas, Lemonade home insurance was quoted at $151.92 a month for standard coverage. Lemonade is often less expensive than other providers, but you’ll need to get quotes for your situation to find out.
Lemonade insurance reviews
Lemonade insurance reviews on consumeradvocate.org also rate Lemonade renters insurance at a 4.8 out of 5 and Lemonade homeowners insurance at 4.9 out of 5. Lemonade is not yet accredited with the Better Business Bureau but does hold an A- rating.
Lemonade is not rated by J.D. Power or financial agencies like AM Best, J.D. Power, S&P Global or Moody’s. However, Demotech gave Lemonade an ‘A’ rating for financial stability.
Frequently asked questions
What information is needed to get a quote from Lemonade?
On the Lemonade site, you’ll be asked to fill in your name and address, the type of home you own or rent and what kind of policy you’re looking for. If you’re looking for homeowners insurance, you’ll be asked questions like:
- The type of fixtures and finishes in your home (to estimate reconstruction costs)
- If you have an alarm system
- When the roof was built or replaced
- If you have a mortgage or loan
- If you’ve filed a home or property claim within the past 5 years
The whole experience takes about 3 minutes, depending on how you answer the questions. You can sign up for your policy right after receiving your quote.
How do I file a claim with Lemonade?
The Lemonade app makes filing a claim as easy as pressing a button. You’ll be taken to an artificial intelligence expert who asks for some details, then you’ll record a short video to explain exactly what happened (don’t worry, it’s completely confidential). Lemonade’s AI will then review your claim and pay you in seconds if your claim is approved. If it’s not, AI turns your claim over to Lemonade’s team of humans to handle ASAP.