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, you may want to consider Lemonade.
A relative newcomer to the insurance market, 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 are searching for home, renters, condo, pet or life insurance, Lemonade offers coverage in most states that you can tailor to fit your unique needs. The company also recently announced its intention to begin selling auto insurance, and is allowing interested customers to sign up now for product information and a sneak peek behind-the-scenes.
What is Lemonade insurance?
With renters insurance policies starting as low as $5 a month and homeowners insurance policies starting at $25 per 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 you get a quote, service your policy, make payments and file claims. 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.
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, Lemonade gave over one million dollars to nonprofits.
Lemonade coverage types
Standard home insurance coverage with Lemonade includes:
- Dwelling coverage: If your home is damaged by a covered loss, Lemonade’s home insurance will pay for repairs or rebuilding costs up to your policy limit.
- Other structures coverage: Detached structures, like sheds, garages and fences are covered for damage up to your limit.
- Personal property coverage: Your belongings, like furniture, clothing and some electronics, are covered under this section of your policy.
- Personal liability coverage: This coverage protects your financial assets if you are found negligent for someone’s injuries or damage to someone’s property, including the cost of a legal defense for lawsuits that allege damage from a covered occurrence.
- Loss of use coverage: If your home is unlivable due to a covered peril, Lemonade will pay for expenses like a hotel or rental home or any other expense that represents a necessary increase in living expenses so you can maintain your normal standard of living.
- Medical payments: If someone is injured on your property, regardless of fault, medical payments may help pay for their bills.
Lemonade’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, you may want to compare Lemonade’s offerings and rates to our list of the best homeowners insurance companies of 2021.
If you rent, Lemonade’s renters insurance can provide financial protection for your items. Standard renters insurance policies cover the cost of stolen or damaged items in a variety of situations, including:
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.
Renters insurance, like home insurance, also typically includes liability coverage, and medical payments coverage may be an option.
Condo owners need a different kind of coverage than homeowners. Lemonade’s condo coverage (called an HO-6 policy) includes:
- Dwelling coverage from the walls in (the association’s master policy should cover the exterior of the dwelling)
- Personal property
- Loss of use
- Personal liability
- Medical payments to others
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.
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 wellness package. This will cover annual checkups, heartworm tests, vaccines and bloodwork. It also provides access to a pet health expert for questions after hours.
Lemonade offers term life insurance policies for as little as $9 per month. No medical exams are required and coverage can be purchased in just five minutes. Lemonade sells policies with term lengths from five to 30 years with up to a death benefit of $1.5 million.
Although detailed information about Lemonade’s new auto insurance product has yet to be released, the company has announced its intention to begin selling coverage. If you are interested, you can sign up for email notifications to stay up to date.
Where is Lemonade insurance available?
Lemonade insurance is available in about half of the U.S, with more widespread coverage for pet and life insurance. 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.
Currently, Lemonade sells its various insurance products in these states:
|State||Homeowners insurance||Renters insurance||Condo insurance||Pet health insurance||Term life insurance|
|District of Columbia||✔||✔||✔||✔||✔|
Lemonade insurance rates
Like all insurance companies, Lemonade’s cost depends on a variety of factors, including property value, location, the deductible you choose and any endorsements that you add.
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 — in general, the higher the limit, the more expensive your premium.
Lemonade insurance reviews
Reviews on consumeradvocate.org give Lemonade renters insurance a rating of a 4.8 out of 5 and Lemonade homeowners insurance a rating of 4.9 out of 5.
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 (Exceptional) 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 residence they live in, whether it is 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 (the video is completely confidential). Lemonade’s AI then reviews the claim and pays in seconds if the claim is approved. If the AI software is not able to approve the claim, it turns the claim over to Lemonade’s team of humans to handle ASAP.
How is Lemonade different from more traditional insurance companies?
Lemonade is disrupting the insurance industry in a few ways. The company’s use of AI is unprecedented and allows Lemonade to quote your policy, put your coverage in place and pay your claims much faster than most insurance companies. One of the most unique features of Lemonade is its business model. Traditional insurance companies make their profit with the amount of money left over after paying claims and covering expenses. Lemonade profits from what it calls a “flat fee” then takes any unused premium and donates it to a charity or organization of your choice.