Lemonade Insurance Review &Complaints: Renters, Home, Condo &Co-op Insurance

Premiums
Claims
Feedback
Financial Strength

Lemonade insurance was established in 2015, making it a newer insurance company that lacks the reputation of some of the best insurance companies with long-standing histories. There are still many questions consumers have about Lemonade insurance, such as, “Does lemonade offer car insurance?” However, Lemonade has begun making its mark as an affordable insurance company with an easy-to-use platform and a caring brand.

If you’re interested in learning more about Lemonade, continue reading to discover its insurance products, rates, and Giveback program.

You can also enter your ZIP code into our free quote comparison tool above to find companies with insurance policies similar to Lemonade’s.

About Lemonade

Lemonade, Inc. was founded in New York City in April 2015. The following year, they founded the Lemonade Insurance Company and began offering home and renters insurance policies. The company’s founders both have a background in the tech industry rather than in insurance, which led to Lemonade’s modern approach to selling insurance products and also to paying claims.

The company expanded quickly and offers home and renter insurance in California, Illinois, Texas, Rhode Island, New Jersey, Nevada, Ohio, Georgia, Pennsylvania, Maryland, Iowa, Wisconsin, Arizona, New Mexico, Michigan, Oregon, Arkansas, Connecticut, and the District of Columbia, in addition to New York. Further expansion into other states is planned in the near future.

Lemonade operates as a public benefit corporation, using a similar model to a mutual insurer where all premiums paid go into a communal fund out of which claims are paid. The company gives back all funds not used for operations and claims to a charity that is selected by the policyholder at the beginning of the policy term. This is called the Lemonade “Giveback”, and it totaled over $2 million in 2021. Lemonade states clearly that the giveback donation is not guaranteed, and in some years, claims may eat up what would otherwise be donated.

What this means is that, unlike traditional insurance companies when not paying out claims means more money stays in the company coffers, the money that does not get paid in claims goes to charity. Lemonade, therefore, states the company has no financial incentive to deny claims, unlike other insurers. It is worth remembering that a big part of why insurance companies like to keep money in the coffers is to be prepared for the times when they have to pay out large amounts in claims – such as after a natural disaster.

In addition, Lemonade plants trees to offset the carbon footprint of its car insurance policyholders.

The company is backed by major reinsurers such as Lloyd’s of London, which gives them more financial stability.

The company operates as a direct-buy insurer without agents or brokers, or sales representatives of any kind. Policies can be purchased either on the website or through the Lemonade app.

Lemonade Insurance Products

Lemonade writes renters, homeowners, condo, and co-op insurance.

Policies are similar to standard home insurance, covering structures, personal property, and liability.

The base policy is a named peril’s policy, which means that you are covered only for those perils listed; these include fire, theft, explosion, vandalism, and more. The Lemonade website does not give a full list of covered perils but does offer a list of exclusions. Even with the base policy, personal property is covered on a replacement cost basis, which is not standard everywhere.

The Extra Coverage option is available to increase protection for specific items over the base policy, something like a high-value item rider on a traditional policy. This includes the addition of accidental loss and damage to the covered perils, and it eliminates the deductible from the policy. Items like jewelry, fine art, cameras, musical instruments, and bicycles can be added to the Extra Coverage list, but all items must be approved before coverage kicks in.

Lemonade also offers the “Zero Everything” option, something of a claim forgiveness program that can be “activated” by the policyholder. Using the Zero Everything feature, the policyholder can make two claims per year with no deductible and no risk of a rate increase. At the end of the policy term, those two claims are “zeroed out” – removed from the record as though no claims had been filed. A third claim in the same year will be subject to the deductible and may result in a rate increase.

The Zero Everything feature allows policyholders to make smaller claims and get reimbursed without the deductible, making the claim not worth filing, or the risk of seeing a rate increase that again makes it not worth filing the claim. It is currently only available in select markets.

In general, Lemonade’s policies are pretty basic – not a lot of bells and whistles. They offer a standard list of discounts, but since they have no other product lines, there is no bundling option.

How much is insurance from Lemonade?

Lemonade has extremely affordable starting rates for all of its insurance products. Let’s examine how much you might pay for each type of policy.

Lemonade Insurance Starting Rates by Insurance Type

While homeowner’s insurance is very difficult to compare rates on due to the many factors that can affect the rate, we tested out Lemonade’s quoting system. We used a sample single-family home in Los Angeles, California at 1,500 square feet, with no claims in the past three years. Lemonade was returned at a rate of $35 a month. That is $420 per year for your insurance premium.

This rate was for structure coverage calculated at $250,000, $125.00 in personal property coverage, and $100,000 in liability coverage, with a $1,000 deductible. Again, it bears repeating that this was a sample house with very little actual detail to the quote, which affects accuracy.

It is hard to compare homeowner’s quotes unless they are apples to apples in every detail, and as a result, we do not often run them. However, there is no question, based on the quotes we have seen in the past, that this is cheap. We took a look at rate comparisons for this area on the California Department of Insurance website (we weren’t able to enter details, so the rate quotes are not a direct comparison) and found an average rate of about $1,200 for this area of the city. Rates ranged from $490 up to more than $4,000, which still puts Lemonade’s quote as one of the lowest, with affordable premiums.

We then ran a quote for the same location but changed it to renters insurance. Despite the promise of renter coverage of $5 a month, our rate came back at $22.92 a month, and that is with no extra coverage. The policy includes $50,000 of personal property coverage with a $250 deductible. Even when we changed the deductible to $1,000, the rate only dropped to $19.09 a month.

We do not generally run comparison quotes for renters insurance, so we are unable to offer a comparison on this particular quote. That said, we did find it odd that it was not that much lower than the full homeowner’s policy cost.

It is helpful to remember that your insurance rates, regardless of their type, will vary by location and coverage levels.

In addition, Lemonade may provide some discounts relative to the type of insurance you purchase. For example, Lemonade relies on telematics to track the driving behaviors of its car insurance policyholders, which can help them earn discounts. There are also some bundling discounts if you have more than one type of insurance with Lemonade.

How do I get Lemonade insurance quotes?

You can receive a Lemonade insurance quote on the company’s website or app. The quote process only takes a few minutes. However, you will need to provide some basic information about yourself, such as your name and address.

Depending on the type of insurance that you are attempting to learn more about, you will need to answer relevant questions. For example, if you want homeowners insurance, you may need to provide information about your home. On the other hand, if you desire car insurance, you may be required to supply information concerning your car.

Lemonade Insurance Claims Process

Ease of Filing a Claim (Online, Over the Phone, Mobile Apps)

Lemonade Insurance offers a modern and convenient claims process for policyholders. Claims can be filed entirely through the Lemonade app, making it a seamless experience for those who prefer mobile solutions.

In cases of emergencies, a toll-free number is available, and an emergency response team will promptly assist. This emphasis on digital channels ensures that policyholders can easily initiate the claims process.

Average Claim Processing Time

Lemonade Insurance prides itself on swift claims processing. According to their website, a remarkable 25% of claims are paid within just three seconds, thanks to their anti-fraud algorithm. While some claims, such as those involving major damage or liability, may take longer to assess,

Lemonade’s commitment to fast payouts is evident. This efficiency can provide peace of mind to policyholders during times of need.

Customer Feedback on Claim Resolutions and Payouts

Customer feedback on Lemonade’s claim resolutions and payouts has been largely positive. Many policyholders have praised the company’s ease of filing claims and the speed at which they are processed. While Lemonade’s claims process predominantly involves digital interactions, customers have reported smooth experiences.

It’s important to note that Lemonade’s unique model, where unused funds are donated to charity, gives them a financial incentive to pay claims promptly and fairly, which is reflected in their customer reviews.

Explore Lemonade Insurance’s Digital and Technological Features

Mobile App Features and Functionality

Lemonade’s mobile app offers a user-friendly interface for policyholders to manage their insurance needs. It enables easy policy management, claims filing, and communication with the company.

The app’s standout feature is the ability to file claims through video, enhancing transparency and efficiency in the claims process. Lemonade’s commitment to mobile technology makes insurance management convenient and accessible.

Online Account Management Capabilities

Policyholders can efficiently manage their insurance policies through Lemonade’s online platform. This includes reviewing policy details, making changes, and accessing important documents.

The online account management capabilities ensure that customers have convenient access to their policy information and can make updates as needed.

Digital Tools and Resources

Lemonade provides policyholders with digital tools and resources to enhance their insurance experience. These may include educational materials, resources for understanding policy terms, and tools for calculating coverage needs. These digital assets empower customers to make informed decisions about their insurance coverage.

Lemonade Insurance Ratings and Consumer Reviews

Lemonade’s current rating with the Better Business Bureau (BBB) is an F, which is the lowest possible rating and not something we see very often. The first reason given by the BBB for the low rating is the length of time the business has been in operation – a factor the business cannot help. They are also dinged for having eight total complaints and for failure to respond to three complaints. Eight complaints is not a high volume for a company that is growing so quickly. The failure to respond to some of those complaints is the only factor here that is of concern.

Lemonade has a 4.75-star overall rating on Clearsurance. There is a total of 62 reviews going into that rating, which is very positive. Worth noting is that the majority of the reviewers are praising the ease of getting a policy and the price – there are only a few that state they did have a claim. Those that did mention a claim, however, again cited a smooth and easy experience.

Unfortunately, Lemonade is not rated by A.M. Best; therefore, we are unable to provide a strong opinion regarding the company’s financial reputation. In addition, Lemonade has an NAIC complaint index of 1.85, which indicates that it receives more customer complaints than expected for a company of its size.

Lemonade insurance’s posted online customer reviews generally disclose positive experiences. Many policyholders are happy with the claims process from Lemonade and with the customer service, they have received both before and during the claims process. Other reviews also reveal the ease of the quote and purchasing process, especially since it is conducted online.

Lemonade Auto Insurance Reviews

Lemonade announced in November 2021 that it now officially offers auto insurance. Currently, its auto policies are only available in the state of Illinois, but the company hopes to expand coverage to more locations. Lemonade car insurance covers standard coverage types such as bodily injury, property damage, and comprehensive coverage. However, there is not much to be found on Lemonade car insurance reviews due to car insurance being a relativity new offering.

Lemonade Insurance: The Bottom Line

Lemonade touts a new approach to insurance that is simple, transparent, and affordable, but a lot of what they offer comes off as slightly gimmicky. Certainly, the price is right here, and Lemonade is backed by strong reinsurers for financial stability, but they are a young insurance company whose model has yet to be proven, particularly against the high cost of a catastrophe. Lemonade is likely to appeal to those who are seeking a modern approach to insurance that fits the busy mobile lifestyle – and we do not see any major red flags that would lead us to recommend avoiding them – but those who are more cautious may want to wait until they have a few more years under their belt to give Lemonade a try.