Not everyone prefers the agency experience when purchasing home, life or pet insurance. If purchasing insurance online with affordable rates and an easy-to-understand and manage process is more your speed, consider Lemonade.
A relative newcomer onto the scene, Lemonade has become a serious contender within the home insurance space. Its unique approach to insurance using an all-digital platform has proven successful. The insurer recently went public, and stock prices doubled. Whether you’re searching for home, renters, condo, co-op, pet or life insurance, Lemonade offers coverage in most states that you can tailor to fit your unique needs.
What is Lemonade insurance?
With plans as low as $5 a month, Lemonade makes insurance coverage affordable and accessible for most renters and homeowners. The high-tech business model uses a mobile app and artificial intelligence to help build a plan, file claims and get paid fast. Unlike traditional insurance companies that can take months to pay a claim, Lemonade can pay in as little as three minutes.
As a Certified B Corporation, Lemonade is a great choice for new homeowners looking to save some cash while still being socially and environmentally responsible.
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?
When someone signs up for a Lemonade insurance policy, they select a nonprofit organization to receive their unclaimed premiums. The premiums they pay go into a pool with others who selected that same non-profit. 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 there are no unexpected fees to worry about).
But since there is no way to predict the number and cost of claims in a given year, policyholders may pay more than what is needed to cover the claims. Unlike many insurance companies who take that leftover money as profits, Lemonade donates that money to charities and causes chosen by its customers through its Giveback program, which donates unclaimed money to that cause each year. In 2020, it gave over one million dollars to nonprofits.
Lemonade coverage types
Standard coverage includes:
- The home, with any costs for reconstruction estimated by Lemonade’s experts
- Other structures on the property, including driveways, fences, sheds, etc.
- Personal property, which includes the total value of electronics, clothing, furniture and more
- Personal liability if someone gets hurt on the property and takes legal action
- Loss of use, which means if the home becomes unlivable due to a covered peril, Lemonade will pay towards a hotel or rental home and living expenses
- Medical payments to others if a guest or neighbor is injured on the property
The company’s home insurance reviews are positive, and their unique claims process can be completed in minutes over the app without ever speaking to a person. Lemonade’s app-based homeowners insurance is perfect for people who want simple, basic home coverage.
When shopping for home insurance, compare Lemonade’s offerings and rates to our list of the best homeowners insurance companies of 2020.
Lemonade renters insurance can protect policyholders’ items up to the total value of their choice. Standard renters insurance policies cover the cost of stolen or damaged items in a variety of situations, including:
- Lightning, windstorm, hail, smoke and freezing (floods, landslides, sinkhole 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 require a value assessment or other proof of purchase. These items can be added to most insurance policies for an additional cost directly from the Lemonade app. Accidental loss or damage can also be covered, which is something not typically covered under a base policy.
Standard coverage (called an HO-6 policy) includes:
- The condo unit
- Personal property
- Loss of use
- Personal liability
- Medical payments to others (under $5,000)
Unlike many insurers, Lemonade offers condo insurance and co-op insurance as separate products. Their condo insurance works well for people who want complete “walls-in” coverage at a lower price than many other insurers. “Walls-in” coverage means that everything within the walls of the condo is insured in case of a qualifying event, including the walls themselves.
Lemonade is one of the few companies that offer insurance specifically for co-op owners. Co-op insurance protects the insured person, their property and their possessions, but not the rest of the building, common areas or grounds.
Like condo insurance, co-op covers:
- The actual unit on the property
- The insured persons’ personal property
- Loss of use
- Personal liability
- Medical payments to others (under $5,000)
Plus, Lemonade insurance automatically covers all family members of the insured person related by blood, marriage or adoption for free.
Earthquake insurance is currently available in Arkansas and California and will be added to more states soon.
Pet health insurance
Lemonade’s pet health policy will insure any furry friends for as little as $10 per month. If the animal gets sick or is in an accident, the pet health insurance policy will cover the cost of diagnostics, treatments and medication, potentially saving thousands in medical bills.
The policy can be upgraded by adding the Preventative and Wellness package. It will cover annual checkups, heartworm tests, vaccines and bloodwork. It also provides access to a pet health expert for questions after hours.
Where is Lemonade insurance available?
Lemonade homeowners insurance is available in about half of the U.S. Keep in mind that while the online-based company provides stellar service, it does not offer any brick-and-mortar locations for in-person customer service.
Right now, Lemonade offers insurance in most states:
|State||Homeowners insurance||Renters insurance||Condo insurance||Pet health insurance|
|District of Columbia||✔||✔||✔||✔|
Lemonade insurance rates
Lemonade’s cost depends on a variety of factors, including property value, location, the insurance deductible chosen and any extra items covered.
Lemonade prides itself on offering affordable rates, with renters coverage starting as low as $5 a month and homeowners coverage starting as low as $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 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 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 a B+ rating.
Lemonade’s homeowners insurance is not rated by J.D. Power or financial agencies like AM Best, S&P Global or Moody’s. However, J.D. Power ranked Lemonade #1 for renters insurance providers in the 2020 U.S. Home Insurance Study, marking the first time an insurtech brand has ever ranked in such a study. Demotech also gave Lemonade an ‘A’ rating for financial stability.
Frequently asked questions
What information is needed to get a quote from Lemonade?
Applicants are asked to fill in their name and address, the type of home, whether it’s owned or rented and what kind of policy is needed. People seeking homeowners insurance will be asked questions like:
- The type of fixtures and finishes in the home (to estimate reconstruction costs)
- Whether there is an alarm system
- When the roof was built or replaced
- If there is a mortgage or loan
- If a home or property claim has been filed within the past five years
The whole experience takes about 3 minutes, depending on how the questions are answered.
How do I file a claim with Lemonade?
The Lemonade app makes filing a claim as easy as pressing a button. An artificial intelligence expert asks for some details; then the insured person will be asked to record a short video to explain exactly what happened (don’t worry, it’s completely confidential). Lemonade’s AI then reviews the claim and pays in seconds if the claim is approved. If it’s not, AI turns the claim over to Lemonade’s team of humans to handle ASAP.