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Lemonade

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Transforming an industry that generally confuses consumers with complicated technical terms and lacks the latest technology is a sizable task, but that's exactly what Lemonade aims to do.

Lemonade is a licensed insurance company offering homeowners, pet health insurance, and renters insurance in the United States. The company is powered by artificial intelligence behavioral economics and is driven by social good. Lemonade is a certified B-Corp and donates its unused premiums to nonprofits selected by the policyholders.

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The Good

  • Giveback Program
  • Hassle-Free
  • Robust Coverage
  • Financially Rated
  • Certified B-Corporation
  • International Presence

Giveback Program

Traditional insurance companies make a profit by keeping the money they don't pay out in claims. This means that the company loses money every time it pays a claim, giving the company the incentive to deny or delay funds.

Lemonade is unique because instead of keeping the money from your premiums, it donates the unclaimed remainder to charitable organizations.

At the end of the year, Lemonade gives back any leftover money to causes chosen by policyholders and uses reinsurance to cover the cases where the group's claims exceed what's left in the pool.

Lemonade's Giveback program includes charities such as American Red Cross, ACLU, New Story, Teach for America, The Trevor Project, 350.org, Direct Relief, and more.

Hassle-Free

Lemonade is known for being extremely technology-friendly. So it's incredibly simple to sign up and get a quote. While the company advertises that the process only takes about a minute and a half, we think 5 to 10 minutes is more accurate if you're carefully going over the coverage and including everything you know about your home or condo. Once you've entered the necessary information, Lemonade provides you with a monthly quote. From here, you can add coverage, choose your deductible, and check for discounts.

When buying homeowners insurance, you can add your mortgage to your policy, and Lemonade will send your proof of insurance. If you're already insured with a different company, you can easily switch since Lemonade will take care of that process for you.

Robust Coverage

Lemonade offers reasonably extensive coverage that's extremely affordable. The coverage you need will affect your monthly price, but homeowners can expect the following coverage from their basic insurance plan:

  • Personal Property — covers theft, damage, or destruction of personal items
  • Reconstruction Costs — covers the cost of repairs to the home
  • Personal Liability — covers medical expenses and legal fees when a guest or neighbor is injured on your property
  • Loss of Use — covers any living expenses if you are forced to leave your home for covered reasons

Lemonade customers can add extra coverage for additional personal property coverage. This extra coverage is helpful for expensive jewelry, fine art, bikes, cameras, and musical instruments to their policies. You can also quickly add your spouse or significant other to your policy (spouses are free, significant others can be added for a few extra dollars a month), add water back-up coverage (covers damage caused by water coming out of your drain or sewer), and add loss assessment (which covers you if your home or condo association charges you for damage to your building).

Financially Rated

Lemonade received a Financial Stability Rating® of A-Exceptional, from Demotech Inc. 

The insurance provider is also reinsured by some of the largest reinsurers in the industry. 

Certified B-Corporation

In May 2016, Lemonade became a Public Benefit Corporation and was awarded the provisional B-Corp Certificate (both firsts for an insurance carrier).

According to the Certified B Corporation website, "Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy."

International Presence

Back in 2018, Lemonade announced that it was extending its business to Europe.

In 2019, Lemonade began offering contents and liability insurance in Germany. A year later, the company launched in the Netherlands and 2020 in France.

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The Bad

  • Limited Customer Insight
  • Not Available Nationwide
  • Some Coverage Gaps

Limited Customer Insight

Best Company has not received many Lemonade home insurance reviews, which means an assessment of the customer experience is not available.

Despite this lack of insight, Lemonade's innovations and giveback program make it attractive for people interested in convenience and supporting nonprofits.

Not Available Nationwide

Although Lemonade plans to be available throughout the United States one day, its coverage is still limited.

Lemonade's Homeowners Insurance is not available to residents of the following states:

  • Alaska
  • Alabama
  • Arkansas
  • Delaware
  • Florida
  • Hawaii
  • Idaho
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Minnesota
  • Mississippi
  • Montana
  • North Carolina
  • North Dakota
  • Nebraska
  • New Hampshire
  • New Mexico
  • Rhode Island
  • South Carolina
  • South Dakota
  • Utah
  • Vermont
  • Washington
  • West Virginia
  • Wyoming

Additionally, Lemonade’s Condo Insurance is not available to residents of the following states:

  • Alaska
  • Alabama
  • Arkansas
  • Delaware
  • Florida
  • Hawaii
  • Idaho
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Minnesota
  • Mississippi
  • Montana
  • North Carolina
  • North Dakota
  • Nebraska
  • New Hampshire
  • New Mexico
  • South Carolina
  • South Dakota
  • Utah
  • Vermont
  • West Virginia
  • Wyoming

Lemonade encourages people to stay tuned as the insurer is continually expanding its services.

Coverage Gaps

Homeowners should keep in mind that Lemonade's insurance coverage does not include structural or personal property damage caused by floods. However, this is not unusual as most insurance companies don't offer flood insurance in their base homeowners policies. But if you specifically want flood insurance, you'll need to look at other insurance providers or buy a separate insurance product.

Depending on your location, you can add earthquake coverage to your Lemonade homeowners insurance policy. However, it's only available to homeowners in California and Arkansas.

Lemonade does not cover high-risk dog attacks. This means you're covered if your dog bites someone as long as they're not considered a high-risk breed and don't have a history of aggression.

High-risk breeds include Pit Bulls, Staffordshire Terriers, Doberman Pinschers, Rottweilers, German Shepherds, Chows, Great Danes, Presa Canarios, Akitas, Alaskan Malamutes, Siberian Huskies, and Wolf-hybrids.

The only exception to the breed restriction is if your dog is certified as a seeing guide dog, hearing dog, or is trained to assist the physically disabled.

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The Bottom Line

Lemonade's structure and technological innovations make it quite different from a traditional insurance company. Lemonade has become popular due to its low insurance premium rates, social good platform, and its technology-driven and transparent pricing policies.

Homeowners can pay as little as $25 per month for homeowners insurance - of course, your insurance rate will depend on a variety of factors such as how much personal property you have, if you choose to add extra coverage, etc. Lemonade is known for being extremely affordable, so we recommend getting a quote and comparing it to other insurance providers.

Homeowners should keep in mind that Lemonade homeowners insurance doesn't cover everything. Be sure to read the fine print and make sure you're getting the exact coverage you need.

As previously mentioned, a Lemonade policy isn't available nationwide. The company has plans to expand; however, when that will happen isn't disclosed.

While insight on the customer experience is limited, homeowners should anticipate a positive experience when working with Lemonade. The insurance provider aims to transform the insurance industry, and we applaud the company's dedication to providing consumers with a fast, affordable, and hassle-free experience.

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