Looking for Lemonade insurance reviews? You are in the right place. Lemonade is a highly innovative insurance company. Unlike most insurance companies that rely on brokers, Lemonade depends on machine learning to deliver a fast user experience so you can get insured quickly.
Beyond cutting-edge technology, Lemonade has a different business twist on the classic insurance business model. Lemonade treats the premiums you pay as your money, which means after taking a flat fee and paying claims, it gives back to causes you care about.
If you want homeowners insurance or renters insurance with extensive coverage, Lemonade is a compelling choice. It is as an A-rated, fully regulated company that is reinsured by Lloyds of London. It is also a certified B-Corp or Public Benefit Corporation, which means that social impact is part of its legal mission and business model.
But what exactly does Lemonade insurance cover and what else do you need to know before choosing Lemonade? In this Lemonade insurance review, we examine the Lemonade pros and cons.
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Lemonade Review Spotlight
|LEMONADE INSURANCE SPOTLIGHT|
4.5 out of 5 stars
via Lemonade secure site
Why Lemonade Insurance Company Is Different
In its first year operating, Lemonade gave 10% of its revenues, amounting to $53,174, to 14 charities.
But why is an insurance company giving a portion of its revenues back to charities?
Early on, Lemonade recognized that the very structure of the traditional insurance industry is riddled with conflicts of interest.
In the traditional insurance industry, every dollar an insurer pays you is a dollar less they add to their bottom line.
When something bad happens to you, the insurance company makes less so their interests are not aligned with yours. You, the customer, and a traditional insurance company fight over the same money.
The conflict of interest means that customers have an incentive to embellish claims, which in turn increases distrust and a vicious cycle is set in motion, leading to ever higher premiums and a frustrating claims process.
Because insurance companies would traditionally make money when denying claims, they have an incentive to deny or delay claims. By contrast, Lemonade avoids these conflicts of interest by taking a flat fee upfront.
Any unclaimed money is then donated to a cause of the policyholder’s choice. As a customer, you select a non-profit where you would like your leftover money allocated.
People supporting the same cause are called peers, and each group of peers has their claims paid out from the premiums they paid in. The leftover money goes to their common cause.
This means that if you engage in fraud by embellishing your claims, you are directly hurting causes you care about.
And because Lemonade takes a flat fee, it doesn’t have any incentive to deny or delay legitimate claims. Instead, it can pay claims faster and with less hassle.
So, Lemonade gathers people who support the same cause and re-aligns incentives to bring out the best in both customers and itself as an insurer.
Lemonade Insurance Coverage
- Renters insurance
- Condo insurance
- Co-op insurance
- Homeowners insurance
After you sign up, but before you pay, you see a summary of your coverage and a sample policy.
At that stage, you can modify your coverage and policy settings, including your deductible and start dates.
Once you pay, Lemonade issues your final policy instantly and sends it to you by email.
The coverage you purchase will extend to the property that you legally own. So, if you have a roommate, they will need to purchase their own insurance coverage.
However, if you are married, your policy will automatically cover all household residents who are related to you by marriage, blood, or adoption.
For non-married couples who live together, you can add their name to your policy for an additional fee.
Once you have signed up, you will be covered for standard perils, including:
Extra living expenses are also covered in case you need to get a hotel because an upstairs neighbor left a kitchen faucet on all day or a kitchen fire damaged your home.
If an adventurous rodent decides to make its home in your home or an insect infestation is discovered, your policy will not cover these yucky situations. Neither will it cover annoyances like power outages, water going out, or heat not working.
Any personal property that is mistakenly broken or lost is not covered either.
Many homeowners insurance and renters insurance policies don’t cover these either so it’s pretty standard that they fall outside the standard coverage policy.
On the plus side, coverage is provided as standard for laptops, phones, tablets, TVs, and other personal electronics.
And if you have items that you want covered, such as jewelry, art, or other personal property, Lemonade can provide you a quote if you send a note with appraised values of the items listed.
Lemonade Insurance Policy
Lemonade calculates policyholder premiums individually based on factors such as credit history, recent claims, and property information, including its age, quality, and size.
If you live in an area prone to weather damage or firestorms, geographical location may affect your premiums too.
The good news is Lemonade may apply discounts depending on whether you have installed protection equipment, like burglar and fire alarms.
You can then pay by credit or debit card. You can even pay via an escrow arrangement whereby Lemonade takes a month’s deposit and, in consultation with you, arranges further payments through your bank if applicable.
Keep in mind that your credit score is a factor that could affect your rates so where possible try to boost it using information available at MyFICO.
Missing an insurance premium payment may also affect your coverage. Sometimes, a credit card is declined and in that case Lemonade will keep pestering you to update to a new one but eventually, if you don’t take action, your policy will be canceled – though you will be warned prior to that happening.
|Lemonade Insurance Coverage||Insurance Coverage Description|
|Personal property coverage||
|Personal Property Valuation||
|Reimbursed living expenses||
|How fast are claims paid?||
|Claims process video recording||
How Much Is Lemonade Insurance?
The cost of Lemonade insurance will depend on factors like your credit history, where you live, your history of filing claims, and other standard criteria.
It will also depend on whether you choose a high or low deductible.
If you make a claim, a high deductible means that you will be required to pay a higher amount. For example, if personal electronic equipment is stolen, you may be required to pay more out of pocket to replace it.
Let’s say your $1,000 laptop is stolen and you had chosen a $250 deductible, your payment in the event of a successful claim would be $750 (which is calculated as $1,000 minus the $250 deductible).
So why choose a higher deductible? Well, the higher deductible may translate to lower monthly premiums.
If you are worried about paying out of pocket, the Zero Everything product may be suitable.
Policyholders who select Zero Everything are eligible to receive claim payments with no deductible, meaning you receive the full replacement cost of items when a claim is approved. Plus, no rate hikes are applied provided no more than two claims are filed per year.
The Zero Everything product is available for renters and condo/co-op owners of the following states:
It is also available to renters in Illinois and Ohio.
Zero Everything is available both to new and existing policyholders and goes into effect upon activation of your insurance policy. When your policy renews, Zero Everything automatically renews too.
Keep in mind that while the first two claims have no deductible, a third claim will trigger a $250 deductible, and the third claim may also trigger a hike in your monthly premiums upon renewal.
|Lemonade Insurance Discount||Discount Description|
|Safe home discount||
|Zero Everythingeligible states||
|Best way to lower premiums||
Is Lemonade Insurance
Right For You?
Lemonade offers renters insurance, condo insurance and homeowners insurance in New York, California, New Jersey, and Nevada.
Renters and condo insurance is available in Texas and Rhode Island.
And renters insurance is available in Ohio and Illinois.
In terms of financial stability, you can take comfort knowing that some of the largest reinsurers in the world are reinsuring Lemonade, including Lloyds of London and XL Catlin.
Lemonade is not yet rated by Standard & Poor’s, Moody’s, or A.M. Best.
|Rating Company||Lemonade Insurance|
|Standard & Poor’s||Not rated|
|Moody’s Investor Service||Not rated|
|A.M. Best||Not rated|
Base policy features using New York data include:
|Personal property coverage||$10,000 → $250,000|
|Personal Liability||$100,000 → $500,000|
|Loss of use coverage||$3,000 → $200,000|
|Medical payments to others||$1,000 → $5,000|
|Deductible options||$250, $500, $1,000, $2,500|
Pros and Cons
|Lemonade Pros||Lemonade Cons|
|✅ Flat-Fee Business Model: Lemonade takes a flat 20% fee from your monthly premiums so it avoids the conflicts of interest associated with most insurance companies when claims are filed by policyholders whereby both customers and insurance companies fight over the same coin.||❌ Coverage Area: Lemonade does not yet have nationwide coverage but insurance options are available in New York, California, New Jersey, Nevada, Texas, Rhode Island, Ohio, and Illinois.|
|✅ Public Benefit Corporation: Social impact isn’t just a nice buzz word at Lemonade – it is part of its legal mission and business model.||❌ Multi-policy Discounts: Lemonade does not offer multi-policy discounts like Allstate.|
|✅ Extensive Coverage: Personal property coverage, additional living expenses, personal liability protection, and medical protection are all included in the base policy provided by Lemonade insurance.||❌ Earthquake Insurance: Lemonade does not provide earthquake insurance.|
|✅ Extra Coverage: Additional coverage can be selected for items like musical instruments, fine art, jewelry, bicycles, and cameras.||❌ Identity Theft: Lemonade does not provide coverage or solutions for identity theft.|
|✅ Ways To Keep Rates Lower: If you have installed safety and security devices in your home and remain claim-free, you are likely to pay lower premiums.|
|✅ Reinsured By Lloyds: Lemonade is reinsured by Lloyds of London and XL Catlin for added protection.|
|✅ Financial Strength: Demotech awards Lemonade an “A’ rating for its financial strength.|
|✅ Online Purchase: Lemonade does not use brokers as intermediaries; all purchases can be made online.|
|✅ Amazing User Experience: Lemonade has a world class user interface that is intuitive, and enables customers to sign up quickly and file claims promptly.|
|✅ Charitable Giveback: Lemonade allocates a portion of its premiums to causes you care about each year.|
Is Lemonade better than other homeowners insurance and renters insurance providers?
Lemonade takes a flat 20% fee from your monthly premium to pay for salaries, technology, regulatory compliance, operations, and so on. When a policyholder files a claim, Lemonade doesn’t win or lose when a claim is paid out because it keeps only the flat fee.
Unlike other companies, which make more money when they don’t pay out claims, and so have a financial incentive not to pay you, Lemonade can be more objective and has its interests aligned with yours.
Are my personal electronics, like my laptop, covered?
Your renters insurance policy or homeowners insurance policy applies to assets you own like your personal electronics and laptop.
Is my jewelry insured?
The base policy covers jewelry up to $1,500. If you have jewelry worth more than the standard coverage limit, you may wish to purchase Extra Coverage.
How does Extra Coverage work?
Your base policy covers furniture, personal electronics, and clothing. If you have fine art, bicycles, musical instruments, cameras, or jewelry, Extra Coverage may be needed.
Simply submit each item with a photo, short description, and receipt for appraisal, and Lemonade will provide an Extra Coverage quote.
What is a hurricane deductible?
If damage is caused by a hurricane, a hurricane deductible applies like any other deductible. Usually, this is suitable for homeowners.
Is the Giveback tax deductible?
At this time, the Giveback feature is NOT tax deductible.
Before Lemonade came along, you probably thought of insurance as a necessary evil and hoped the day would never come when you had to file a claim because your insurance company would probably resist paying you if at all possible.
In the old insurance industry model, policyholders and their insurance companies fight over the same coin, creating conflicts of interest. Customers have an incentive to embellish claim amounts, and insurance companies have an incentive to hike premiums.
Lemonade has fundamentally changed how insurance is bought. By taking a flat fee payment of 20% on each premium payment, Lemonade can adjudicate claims more objectively because, unlike other insurance companies stuck in the old way of doing business, it doesn’t lose when it pays out claims to policyholders.
When you don’t file a claim, Lemonade takes a portion of the premiums and donates them to causes policyholders care about, which lowers their incentive to engage in fraudulent behavior.
Whether buying renters insurance or homeowners insurance, Lemonade can provide coverage, though it is not yet nationwide.
The bottom line is if you want an insurance company that avoids the conflicts of interest inherent in the industry, Lemonade is worth checking out.