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Lemonade

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LAST UPDATED: April 8th, 2021

Lemonade Insurance Company is an innovative insurance company with a social conscience that is highly conscience. It gives unused claims to policyholder's chosen causes annually.

This unique approach makes Lemonade stand out from traditional insurers.

Lemonade also stands out for its mobile app. Using Lemonade's App, it's easy to see rates and purchase a policy quickly, in as little as 90 seconds.

The API technology also makes it easy to file claims. You don't have to worry about filling out forms, you can even record yourself talking about your claim.

Lemonade aims to create an insurance experience that is fast, affordable, and hassle-free. It's a company dedicated to its policyholders and having tangible a social impact.

Lemonade offers renters, pet health, and homeowners insurance.

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The Good

  • Transparency
  • Reliable Company
  • Giveback Program
  • Coverage
  • Technology Friendly
  • Quick Claims Process

Transparency

Lemonade believes in being transparent about its setup. The company only takes a flat 20 percent fee off of a premium to help cover salaries, running costs, reinsurance coverage, and keeping the technology up-to-date. The rest of the premiums go to insure customers.

If there is any additional money remaining at the end of the year, Lemonade will donate up to 40 percent of the remainder to the policyholder's specified charity.

Reliable Company

Most insurers have long histories in the industry, which shows longevity. It's also important to consider financial strength ratings when choosing an insurer because these indicate an insurer's ability and likelihood to pay out claims.

Lemonade is a newer insurance company and does not have financial strength ratings. However, it has received a high Financial Stability Rating® from Demotech.

Lemonade also reinsures its policies for additional protection. These two factors make Lemonade a reliable company even though it is much younger than many of its competitors.

Giveback Program

Lemonade's Giveback Program is unique because it takes away the incentive for providers to minimize payouts to their clients to maximize their profits. The program also allows Lemonade customers to choose the charities they want their leftover premiums to go to.

Lemonade donates up to 40 percent of unclaimed premium dollars to the specified nonprofit.

More established insurers also give back to communities through volunteering and partnerships with nonprofits and other organizations.

However, the ability to direct excess funds to organizations that directly impact your community or are meaningful to you makes Lemonade's social impact efforts more tangible to policyholders.

Coverage

For the price, Lemonade offers reasonably extensive coverage. The coverage you need will affect your monthly price, but renters and homeowners can expect the following coverage from their basic insurance plan:

  • Personal Property — covers theft, damage, or destruction of personal items
  • Reconstruction Costs — if damage is done to the home, Lemonade coverage will cover the cost of the repairs
  • Personal Liability — covers medical expenses and legal fees when another person is injured
  • Loss of Use — covers any living expenses if a customer is forced to leave their home for covered reasons

Technology Friendly

Lemonade takes advantage of the fact that just about everyone has a smartphone on them these days. So, signing up for an insurance plan is extremely simple.

The Lemonade app has a simple design and makes it easy to request a quote and file claims. Customers can also change their coverage and it will immediately appear on the app.

However, it is important to know that Lemonade only allows consumers to sign up through its mobile app or online website.

Quick Claims Process

Lemonade's app runs an API to detect fraud, which means you can have your claim approved in seconds. If something is flagged, then one of Lemonade's (human) staff will take care of it quickly.

The ability to have claims approved instantly and conveniently through a mobile app is an excellent perk of choosing a Lemonade renters policy.

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The Bad

  • Insufficient Customer Reviews
  • Limited Coverage
  • No Auto Insurance Bundling
  • Not Available Nationwide

Insufficient Customer Reviews

Lemonade renters insurance reviews on BestCompany.com are few, which makes it difficult to make a recommendation based on the client experience.

However, Lemonade's website speaks to its professionalism and its commitment to transparency makes its renters insurance worth exploring further.

Limited Coverage

Unfortunately, not everything is covered with a basic renters insurance policy. While having renters insurance is excellent for stolen or damaged items (accidental damage doesn’t count), there are a few things that aren’t covered. Here are a few scenarios where customers might need to buy additional coverage:

  • Natural disasters — Renters and homeowners who live in an area that is susceptible to flooding, sinkholes, or earthquakes may need to purchase an additional flood insurance policy along with their basic coverage plan. Additionally, earthquake coverage is only offered to residents of Arkansas and California.
  • Car theft — If someone steals your belongings from inside your car, renters insurance covers you. However, if your car is stolen or damaged, renters insurance can’t help (you’ll need auto insurance).
  • Roommate — Your policy covers all residents of your household who are related by blood, marriage, and adoption. However, if your roommate’s belongings are stolen, lost, or damaged, your policy doesn’t cover them. They will need to get their own policy.
  • Pests — Renters insurance doesn’t cover damage caused by pests; neither will it cover the cost of an exterminator.
  • Property Damage — Your policy covers all your belongings but it doesn’t cover the physical building (that’s the responsibility of your landlord).

Some insurers include coverage for some of the above scenarios in their policies like pests or allow you to add extra coverage for these cases. Some allow you to add roommates to your policy for no additional fee.

If you want more comprehensive renter's insurance coverage, you'll need to consider extra coverage options from other insurers.

No Auto Insurance Bundling

Many insurance providers offer discounts when you buy both renters and car insurance from the same company. If you want this kind of discount, you'll need to work with another insurance carrier.

Lemonade doesn't offer car insurance, so this discount is not available. However, if you buy both renters and pet health insurance, you'll receive a discount.

Not Available Nationwide

Currently, Lemonade is only available to residents of the following states:

  • 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

Renters and homeowners outside of these 26 states will have to wait. However, Lemonade encourages people to stay tuned as the insurer is continually expanding its services and plans on being available nationwide.

Lemonade is also available to residents of Washington, D.C.

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The Bottom Line

Aiming to revitalize and update the insurance industry Lemonade is an innovative insurer that offers renters, co-op, pet health, homeowner, and condo insurance.

The insurance company has a straightforward and simple sign up process and offers a decent amount of coverage for an affordable price. 

Lemonade customers also don't have to worry about filing claims or wonder where all their premium money is going. Lemonade stands out for its high level of transparency.

Keep in mind that renter's insurance doesn't cover everything, and potential customers should read the fine print to make sure they're getting the exact coverage they need. 

While Lemonade isn't available nationwide, the company has plans to expand; however, when that will happen isn't disclosed.

Even though BestCompany.com has little insight on the customer experience with Lemonade, the company's commitment to transparency, social impact, and conscientious approach to its clients' premium dollars make it worth considering.

If you're looking for renter's insurance coverage with social impact and Lemonade is available in your area, we recommend exploring Lemonade's renter's insurance product.

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