Lemonade Home Insurance Review

This forward-thinking insurance carrier is rooted in social impact

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Lemonade

Founded in 2015 by Daniel Schreiber and Shai Wininger, Lemonade isn’t afraid to make a statement. It makes the bold claim that the current insurance model is riddled with problems, and it is on a mission to transform the industry. To date, Lemonade has served more than 1.2 million affordable insurance policies through its app and online platform.

  • Pros & Cons
  • Key Takeaways
  • Company Overview
Pros & Cons
Pros
  • Affordable policies 

  • Highly rated app

  • Full transparency about its policies 

  • Certified B-Corporation

Cons
  • Limited insurance bundling opportunities

  • Only available in 23 states (and the District of Columbia)

  • No insurance agents


Key Takeaways
  • Created to address issues in the insurance industry
  • Affordable policies
  • Certified B-Corp
  • Puts money remaining from customer premiums back into the community
  • Limited discounts
Company Overview
  • Year Founded 2015
  • Official Website www.lemonade.com
  • Insurance Offered homeowners, auto, pet, condo, and renters
  • Customer Service Monday to Friday, 9 am to 8 pm EST (844) 733-8666, chatbot 24/7

Pros Explained

  • Affordable policies – According to the National Association of Insurance Commissioners (NAIC), the average policy for homeowners insurance in 2017 was $1,211, or $100.92 per month. Lemonade’s home insurance policy can be as low as $25 a month. Because Lemonade uses artificial intelligence (AI) and machine learning, it isn’t heavy on personnel in the way of customer support and agents.
  • Highly rated app Lemonade shares a lot of the same standard features of other insurers who offer apps, such as the ability to file a claim and download forms and documents. What makes it different is that you can make adjustments to your policy within the app. You don’t have to give Lemonade a call or fill out new paperwork.
  • Full transparency about its policies Lemonade clearly explains the ins and outs of its policies on its website. Any additional questions can be directed to its chatbot, Maya.
  • Certified B-Corporaton – Being a B-Corp is more than simply touting yourself as a socially responsible company. Standards of environmental and social performance, accountability, and transparency must be adhered to. In other words, social and environmental responsibility are baked into Lemonade’s business structure. A tangible socially responsible business practice is its Giveback program. Instead of holding onto money left over at year’s end from premiums as profit, that money goes to helping the community.

Cons Explained

  • Limited insurance bundling opportunities Because Lemonade only offers five types of insurance, four of which are for different types of housing, your ability to bundle policies to get a discount is limited. Still, you can bundle your homeowners, renter’s, condo, or co-op insurance with pet insurance and save up to 10% on your monthly premium.
  • Only available in 23 states (and the District of Columbia) – Should you purchase a policy with Lemonade only to later move to another state, there’s a chance Lemonade might not be offered in your new stomping grounds. 
  • No insurance agents – Lemonade points out that its chatbot, named Maya, will answer all your questions and doesn’t take a commission, like a human insurance agent would. However, there’s something to be said about talking to an actual person and getting questions answered that are specific to your situation. The benefit of this is that it reduces the cost of your premiums.

Standard Home Insurance Coverage Plan

Here’s what you can expect with Lemonade’s standard home insurance plan:

  • Dwelling Insurance – This covers the actual structure of your home. It usually also covers any structures that are attached to your home, such as a garage (if attached), deck, and the electrical and plumbing systems. Dwelling insurance will cover the cost to repair or reconstruct your home should it suffer damage under a covered loss.
  • Other Structures Insurance – This is everything that’s on your property that isn’t attached to your home or part of the natural environment. A stand-alone mailbox, driveway, fence, detached garage, and tool shed are examples of what is covered under other structures coverage.
  • Personal Property Insurance – This will pay for the cost to replace the total value of your personal belongings—think clothing, furniture, and electronics. Should your home get broken into or your possessions get damaged under a covered peril, you’ll be taken care of. Usually, high-value items such as art, jewelry, and collectibles are covered but only up to a certain amount. You normally need to get additional insurance for any costs above that.
  • Personal Liability Insurance – In the unfortunate case that someone gets injured while on your property, liability insurance will cover medical bills, legal costs, and property damage. The limits vary and depend on your policy. 
  • Loss-of-Use Insurance – Also known as “additional living expense (ALE) insurance,” this will pay for the extra cost of food and staying elsewhere should you need to temporarily uproot because your home is uninhabitable. For instance, if you typically spend $500 a month on groceries for you and your family but spend $800 eating out while your house is being repaired, ALE covers the difference. Of course, remember to hold on to those receipts.
  • Medical Payments Insurance – If someone else gets hurt or injured on your property, this will cover medical expenses. No matter who was at fault—you, a member of your household, or a pet—personal liability insurance will foot the bill for the medical and legal costs. This usually has lower coverage amounts than personal liability insurance.

Factors That Affect Rates

While each insurance company may use slightly different criteria, here are the factors they generally consider when determining your rates: 

  • Property Location – Homes near a body of water, such as along the coast, generally cost more to insure. Also, if you live in an area that’s prone to wildfires, your insurance will likely be more expensive.
  • Roof Condition – The better your roof’s condition and the newer it is, the lower your premium will likely be. 
  • Home Characteristics The size of your home, the materials it’s made of, and if you have a trampoline in the yard or a wood-burning stove in the kitchen all affect the cost of your premium.
  • Claims History – Statistically, if you’ve filed claims before, there’s a greater likelihood that you’ll file a claim in the future, which could bump up the cost of your insurance, as could filing the same claim multiple times.
  • Home Security Systems – The greater your investment in protecting your home and belongings, the less expensive your policy. We’re talking about installing a home alarm, indoor fire sprinklers, deadbolts, or a security camera.
  • Dog Bites If there’s a history of reported dog bites on your property, your policy will probably be costlier.
  • Credit History Your credit history doesn’t just affect your ability to get financing; it also affects the cost of your insurance. The stronger your credit score, the lower your premium.
  • Home-Based Business – Because having clients or customers visiting you in your home increases the likelihood of an accident happening, this could potentially up the cost of your policy. And while some of the equipment and supplies for your home-based business might be included in a standard homeowners insurance policy, not everything will be.

Lemonade Home Insurance Discounts

Lemonade’s Get Discounts feature is integral to its process. When you’re getting a quote for your policy, it will let you know which discounts you’re eligible for and how much they will lower your premium. In particular, the installation of smoke detectors, burglar alarm systems, sprinkler systems, and deadbolts, as well as having water and temperature alerts and wind protection, all shield your home against theft and the threat of fire and can reduce your premium. Any security devices you install need to be part of a system that checks off these three boxes: 

  • Sounds an alarm within your home 
  • Is linked to a central reporting station 
  • Calls the police
HO3 vs. HO6 Insurance

Homeowners insurance is based on different categories. HO3 is a type of policy that is for a house that’s occupied by the owner. HO6 is a type of policy that’s designed for the owner of a condo unit.

Lemonade Home Insurance Availability

Lemonade is currently available in 23 states (and the District of Columbia): Arizona, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin.

Other Lemonade Home Insurance Policies

Extra Coverage is an add-on for personal property to protect your jewelry, fine art, and that coveted, pricey pair of golf clubs. It covers accidental loss—when you’ve misplaced something—or accidental physical damage.

Lemonade Customer Service

You can get assistance in one of three ways: by phone, via email, or through Lemonade’s Maya chatbot feature on the app. As you might’ve guessed, using Maya is the easiest, speediest way to get help. If Maya can’t help, then your request or question on the chat function gets rerouted to a member of the customer support team. Their business hours are Monday to Friday, 9 a.m. to 8 p.m. ET. You can give them a ring at 844-733-8666.

How to Make a Home Insurance Claim With Lemonade

According to the NAIC, there was a grand total of five consumer complaints for Lemonade’s homeowners insurance in 2019. However, looking at the Complaint Index, which measures how a company fares against other providers in the insurance industry, Lemonade has a rating of 2.28 for its homeowners insurance, which is more than double the industry average of 1.0. The majority of complaints were about how the claims were handled. Lemonade’s app, however, fares quite well, receiving a 4.9 out of five stars and nearly 36,800 reviews on Apple’s App Store and a 4.6 out of five stars and about 7,900 reviews on Google Play. 

Lemonade Home Insurance Cancellation Policy

You can cancel a Lemonade homeowners insurance policy whenever you like through the app. A refund will be issued for any advance payment. Money from your premium that is paid back through its giveback program won’t be contributed to the Giveback program. One small thing: If you are moving, you don’t have the capability to switch addresses. You’ll need to cancel your existing policy and set up a new one.

Other Insurance Provided by Lemonade

Lemonade offers four other types of insurance policies.

Get a Lemonade Homeowners Insurance Quote

Lemonade can offer a quote in a very short amount of time. You can sign up for a policy through its app or on its website. While you can get your answers by giving Lemonade a ring during its business hours, you cannot sign up for a policy over the phone. 

Verdict

Lemonade is an affordable, forward-thinking, bold challenger insurance company that harnesses AI and machine learning to be efficient and pass on savings to the policyholder. If you’re not keen on handling your insurance through an online platform instead of with an agent, then you’ll be better off with another insurance company.

Compare Other Home Insurance Reviews

While you might be leaning toward Lemonade for your home insurance needs, it’s a good idea to do your homework and research other insurance providers. As there are advantages and downsides to every insurance company and their policies, compare several before making a decision.

Methodology

Investopedia is dedicated to furnishing consumers with unbiased, comprehensive reviews of homeowners insurance providers. We reviewed each insurance provider’s coverage options, available discounts, customer services and satisfaction ratings to ensure that our content helps users make the right insurance decision for their needs.

Article Sources

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  1. National Association of Insurance Commissioners. "NAIC Releases Report on Homeowners Insurance." Accessed Oct. 9, 2020.

  2. National Association of Insurance Commissioners. "Lemonade Ins Co Number of Complaints by Type of Coverage." Accessed Oct. 9, 2020.

  3. National Association of Insurance Commissioners. "Lemonade Ins Co National Complaint Index Report." Accessed Oct. 9, 2020.

  4. Apple.com. "Lemonade Insurance (4+) Homeowners, Renters & Pet Lemonade Inc." Accessed Oct. 9, 2020.

  5. Google.com. "Lemonade Homeowners, Renters, and Pet Insurance." Accessed Oct. 9, 2020.