Lemonade Insurance Review for 2020
A relative newcomer to the insurance space, Lemonade touts low premiums for home and renters insurance and takes pride in a somewhat unusual business model: peer-to-peer. Most traditional insurance companies collect premiums and keep the remaining capital after paying out claims and other expenses as profit. In Lemonade’s case, after pocketing a fixed percentage of premiums as profit, and paying for claims and reinsurance, the company donates the leftover funds left in the pool of unclaimed premiums to charities and non-profits chosen by policyholders. This program is called Giveback.
In addition, Lemonade does not employ insurance agents or agencies to sell policies; instead, they rely on the liberal use of artificial intelligence and other trailblazing technologies not often found at many insurance providers. Policies are only sold through their website and mobile app, and the company is known for a speedy claims process.
With a sleek, easy-to-use website, cheap rates, and a message advocating for social good, Lemonade may be an appealing choice for those looking to save on home or renters insurance. Lemonade coverage is currently available in Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Wisconsin, and Washington, D.C.
Our Lemonade insurance review explores coverage options, discounts, and more to help you make an educated decision with your renters or home insurance coverage.
Lemonade renters insurance coverage options
The usual coverages for personal property, personal liability, loss of use (also known as additional living expenses), and medical payments to others are offered by Lemonade’s renters insurance. Coverage limits for each can be lowered or increased according to your needs, and customers can choose their own deductible, which ranges from $250 to $2,500. Lemonade also offers a few add-ons to supplement a renters insurance policy with some extra protection.
Scheduled personal property
Particularly valuable items come with their own sub-limits when it comes to personal property coverage. Items like electronics come with specific caps on how much you can be reimbursed. Endorsements for scheduled personal property extend these limits, and Lemonade offers the choice of adding extra coverage for jewelry, fine art, bicycles, cameras, and musical instruments.
Water backup coverage
Insurance will only cover water damage under specific circumstances. With this optional add-on, Lemonade will cover damage caused by water expelled from drains or sewers. This is a common endorsement in property insurance.
Currently available only in California and Arkansas, Lemonade's earthquake coverage offers extra protection for customers in these states. Damages caused by earthquakes are typically excluded from a renters policy, and not all insurance companies offer earthquake coverage, even as an extra endorsement. Lemonade partners with Palomar Specialty Insurance to offer earthquake coverage as an add-on.
Lemonade home insurance review
Lemonade’s options for homeowners insurance are quite standard, offering all the expected coverages: the reconstruction of your dwelling, personal property, liability, loss of use, and medical payments to others. Deductible amounts range from $250 to $10,000. Like with renters insurance, Lemonade makes available some extra add-ons meant to bolster your home policy.
Scheduled personal property
Extend coverage limits for certain valuables, like jewelry, fine art, bikes, cameras, and musical instruments with scheduled property endorsements. Without extra coverage, the reimbursement you would receive should these items be destroyed or stolen would be restricted by the item category’s sub-limit. If you own many valuables, like electronics, it would be prudent to ensure sufficient insurance protection is in place.
Water backup coverage
Get extra protection for water damage with Lemonade’s water backup coverage. This protects against potential damage from water coming from drains and sewers. Because homeowners insurance is specific about what kinds of water damage it will cover, having extra protection is a good safeguard should you experience something like a burst pipe or sewer backup. This is a common endorsement for home insurance.
Homeowners in California and Arkansas have earthquake coverage available as an option when enrolling in Lemonade’s home insurance. Earthquake damage is typically excluded from a homeowners policy, and homeowners usually need to purchase a separate earthquake policy.
Extended reconstruction costs
Another popular endorsement for homeowners insurance, this coverage guarantees that your home is rebuilt even if the cost of rebuilding is higher than expected. This rider provides additional coverage even if the coverage limit for your dwelling is exhausted.
Lemonade insurance discounts
Lemonade does not advertise discounts for renters insurance.
Homeowners may be in luck with a few discounts that are built into their rates.
- Home materials: see some savings if your home is built with masonry — which is more fire-resistant than a wood frame, and therefore less risky.
- Fire and security systems: get discounts for having fire extinguishers, smoke detectors, central station and fire department reporting alarms, sprinkler systems, and deadbolts in your home.
One downside to Lemonade’s insurance is that they do not offer nearly as many discounts as other insurance companies. This is likely due to their exceedingly low premiums offsetting much demand for a further discounted rate; pricing starts at just $5 a month for renters insurance and $25 for homeowners.
Is Lemonade the right insurance company for you?
If you’re tired of dealing with the red tape of more traditional, monolithic insurance companies, and don’t need a ton of extra bells and whistles to go along with your renters or homeowners policy, Lemonade could be a refreshing option with very low rates. Lemonade’s investments in cutting-edge technology deliver a seamless quoting process, and many happy customers attest to quick claims payouts and overall positive experiences. Their charitable streak also doesn’t hurt, acting as a positive perk Lemonade customers can feel good about year after year.
However, it is worth noting that Lemonade received slightly more complaints than average, according to the NAIC, and they are not yet rated by reputable organizations like J.D. Power and A.M. Best. It is ultimately up to you to decide if Lemonade has the coverage you’re looking for at the best price.