This insurance company has a bit of a punch to it.
Lemonade is a home insurance company that offers homeowners insurance and renters insurance. Lemonade leverages artificial intelligence to secure low home insurance rates for policyholders on a budget. Indeed, as Lemonade is driven by “AI and Behavioral Economics,” Lemonade considers itself a tech company first and foremost, distinct from the old model of property and casualty insurance.
Lemonade prides itself on charging customers a flat fee and handling claims payouts instantly. And unlike most traditional insurance companies, Lemonade is distinctly devoted to customer centricity and social good (more on that below).
But how exactly does Lemonade work, and is it really the next big thing in home and renters insurance? Let’s investigate.
How does Lemonade work?
Lemonade Insurance Company was founded in 2015 by Daniel Schreiber and Shai Wininger. It offers renters and homeowners insurance policies. These policies can apply to homes, apartments, condominiums, and co-ops.
Lemonade currently offers homeowners, condo, and renters insurance policies in the following states: Arizona, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Michigan, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin; plus the District of Columbia. It provides renters and condo insurance in Rhode Island as well as renters insurance in New Mexico and Arkansas. It plans to continue expanding across the United States.
A cutting-edge startup making a splash in the insurance industry, Lemonade uses artificial intelligence and chatbots to provide insurance policies and handle claims. Lemonade does not employ insurance brokers. Instead, it relies on complex algorithms and AI technology to deliver quality service and insurance products to its customers.
In its own words, Lemonade treats your cash like it’s still your cash:
Lemonade was built differently. We take a fixed fee out of your monthly payments, pay reinsurance (and some unavoidable expenses), and use the rest for paying out claims. In essence, we treat premiums as if they were still your money and return unclaimed remainders in our annual ‘Giveback’.
Although one of Lemonade’s primary goals is to make a profit and sustain the business, Lemonade’s Giveback program is part and parcel of its unique claims process. Through Giveback, each year, customers get to choose which nonprofits will benefit from the underwriting profits of unclaimed premiums.
Lemonade also has a “Zero Everything” policy, which allows for payments of up to two claims per year, with no subsequent rate hikes the following year. That means no deductible and full replacement cost, twice a year, for nearly any catastrophe.
The Lemonade app, available for iOS and Android smartphones, is also a central component of Lemonade’s model. Policyholders can file claims, process payments, and even cancel their plan directly through the app.
What coverages does Lemonade offer?
As mentioned above, Lemonade offers home and renters insurance policies. It also provides condo and co-op insurance as well as landlord insurance in New York, California, Texas, Illinois, Pennsylvania, New Jersey, and the District of Columbia for qualifying landlords.
- Personal liability coverage for anyone who lives under your roof in your immediate family (including your spouse or immediate family members by blood or adoption)
- Liability coverage for people under the age of 21 in your car or in care of a relative also living in your household
- Liability coverage for pets (except high-risk dog breeds), including service animals
- Property damage and theft
- Perils and extra living expenses
Extra Coverage is also available for fine art, jewelry, watches, and other prized possessions.
Roommates do not count under these policies.
Lemonade lets you reduce or increase coverage limits via the mobile app.
Lemonade does not provide auto insurance, so policyholders can’t bundle it with their home policy for the sake of convenience or to secure a multi-policy discount.
Will Lemonade squeeze you dry?
Lemonade prides itself on charging highly affordable renters and home insurance rates for its policyholders.
The Lemonade home page advertises renters insurance rates as low as $5 per month. That’s not even 20 cups of coffee a year for the average resident of Manhattan. (MANHATTAN.)
Lemonade’s homeowners insurance rates are also industry-leading, or so it claims: rates as low as $25 a month? That’s no joke.
But are all Lemonade policies so cheap? I took it upon myself to see if Lemonade passed my taste test.
On the Lemonade website, I was greeted by “Maya,” Lemonade’s AI persona.
The application flow was impressively intuitive. “Maya” asked me one question at a time, gauging relevant information like whether I was closing on a new home or switching insurers (I chose the former), if it was to be my primary residence, the size of my new home in square feet, the fixtures in my home, etc.
I also had to enter my email and the last four numbers of my SSN. Apparently, Lemonade required both to generate were my quote. I was dubious, but I did it for you all, so you’re welcome.
My initial quote was $235.25.
But that wasn’t the end of the journey for me. Naturally, I was curious to see if I could get a lower quote…and Lemonade seemed to read my mind. I scrolled down to various coverage options and policy add-ons that, when toggled higher or lower, adjusted my quote accordingly in real time.
I decreased my personal property coverage from $160,000 to $130,000. Voilà, the quote went down to $233.09 per month. Similarly, when I set my reconstruction costs coverage to the minimum offered ($252,000) my premium dropped even more to $207.59 per month.
But then it occurred to me that I might want extra coverage for some of my most prized belongings. To protect my bike and digital camera, I added $1,000 replacement coverage for both. My policy went up to $209.75.
Then, I lowered my claim deductible from $2,500 to $1,000. My rate increased again, to $229.17.
You get the drill. Lemonade gave me many tools to raise and lower my rates, based exactly on what worked for my budget and needs. Accordingly, it told me what would and wouldn’t be covered under this customized policy, for better or for worse. Ultimately, I elected for the minimum coverage levels offered for basic coverages, plus the extra protection for my bike and camera, and a deductible amount of $1,000. A grand total of $227.25 per month.
Okay, so not the $25 as advertised. But that’s probably due to factors beyond my control in this scenario, such as the house type, its geographic location, and the preexisting fixtures, to name a few. Lemonade gave me the option to purchase my policy then and there online (via debit or credit card) or integrate my policy into my closing costs. Pretty snazzy.
Lemonade Insurance Reviews: Are they sweet or sour?
The online experience is one thing; dealing with Lemonade as your home or renters insurance provider is entirely another.
Lemonade reviews vary from joyous to ambivalent. Users often comment on its flexible insurance coverage options, transparency, and easy-to-use technology.
The 250+ customer reviews on Clearsurance are overwhelmingly positive. However, the vast majority of these reviews are from Lemonade renters insurance policyholders, bestowing an average score of 4.8/5. By contrast, homeowners gave an average satisfaction rating of 3.88/5.
It appears Lemonade’s unique claims handling process is a double-edged sword. Could these two reviews be more divided?:
Lemonade has seen its share of customer complaints on the Better Business Bureau (BBB) but maintains an A+ rating, although the company is not BBB accredited.
|Better Business Bureau Rating||A+|
The chatter over at HighYa, another review aggregator, is pretty positive, where Lemonade has a rating of 4.5/5. Ninety percent of users report they’d recommend Lemonade to a friend.
Even Redditors are on board:
So who can’t stand Lemonade?
All the review aggregators and approved sites have a few spoiled apples (lemons?) in there. Some aren’t in love with the company’s tech-forwardness; some have gone as far to call Lemonade a scam. Regardless, as it is with all insurance providers or anyone you’re entrusting with your money, you have to do your research first. (Good thing you’re here!)
This table shows Lemonade’s official Insurify Composite Rating, based on a combination of reviews from aggregator sites:
|Site||Customer Rating||Number of Reviews|
|Total Score||4.7 / 5||472|
|Clearsurance||4.8 / 5||278|
|HighYa||4.5 / 5||194|
Lemonade is rated 4.7 out of 5 based on 472 reviews.
Bottom line: When life gives you Lemonade….
So, is Lemonade worth a shot for new homeowners and renters? That’s up to you if you count yourself among them. But at the end of the day, that’s just one quote you could be receiving. But what if you want to compare a Lemonade policy to that of another insurance provider? Lemonade doesn’t have to be the end of your home or renters insurance journey.
More about Lemonade
Lemonade Insurance Company is currently headquartered at 5 Crosby St. 3rd Floor, New York, NY 10013.
Phone number: 1 (844) 733-8666
Customer service email: firstname.lastname@example.org