With at least 20 insurance policies and a decade covering the industry under my belt, I was tempted to think I’ve seen it all when it comes to insurance. But Lemonade, a digital insurance company, really simplifies insurance shopping, buying, and claims for people who have better things to do. And don’t we all?
Lemonade is affordable, tech-savvy, and super-easy to use. It’s also serious about giving back, sending a significant share of premiums to charities chosen by its policyholders. It’s not perfect, but it’s definitely worth a closer look if you’re in the market for a new property, life, auto, or pet insurance policy.
What Is Lemonade?
Lemonade is an online insurance company that offers several types of insurance for consumers. Its insurance products include:
That all sounds pretty standard, but Lemonade isn’t your run-of-the-mill insurance company. They treat the money you give them as your money. If at the end of the year, they have cash left over, they take what amounts to a maintenance fee and donate the rest of it to the charity of your choice.
And Lemonade doesn’t just do right by its policyholders. As a certified B-corp, a corporation that operates as much to benefit society as make money, Lemonade’s business model incorporates profit, people, and planet. Lemonade plants trees to offset its car insurance customers’ carbon emissions and donates a portion of its annual revenue to charity. And somehow, it’s still one of the more affordable insurance companies around.
How Lemonade Insurance Stacks Up
Lemonade stacks up well against bigger insurance companies despite its more limited range of products and shorter track record.
But is Lemonade the best choice for you? See how it compares to Progressive, the United States’ biggest auto insurer and third-biggest property casualty insurance company overall.
|Types of Insurance||Home, renters, auto, pet health, life||All that and more|
|Premiums||Starting at $5 per month for renters insurance||Minimums undisclosed|
|A.M. Best Rating||N/A||A+ (Superior)|
What Sets Lemonade Apart?
There’s no shortage of reputable insurance companies eager to grab your insurance premiums. It’s all a bit overwhelming.
Fortunately, Lemonade stands out from the pack for several big reasons.
- Affordable Premiums. Lemonade is very affordable. Like, starving-student affordable. Renters insurance premiums start at just $5 per month, life insurance premiums at just $9 per month, and pet health insurance premiums around $10 per month. But the offerings are also scalable, meaning the rest of us can potentially find the right coverage too. We’ll just pay more for it.
- Social Responsibility. Lemonade doesn’t just pay lip service to social responsibility and environmental stewardship. It donates serious money to charity and goes above and beyond to offset auto insurance customers’ carbon emissions.
- Super-Easy to Apply and File a Claim. Lemonade is the most tech-savvy insurance company I’ve come across to date. It takes just a few minutes to apply for and activate a new policy, and the all-digital claims process is a breeze too.
Lemonade Insurance Products & Pricing
Lemonade offers a limited but useful mix of products. You can bundle any combination of Lemonade insurance types to snag a bundle discount. The exact amount of the discount varies depending on which policies you combine and how many you have, but expect at least 10% off the combined premium.
Lemonade offers five types of insurance products.
Lemonade’s renters insurance policies start at just $5 per month. That’s significantly cheaper than many competitors, so take note if you’re on a tight budget.
One partial explanation for Lemonade’s affordability is that your policy is fully customizable, and your premium depends on your coverage limits. You set your coverage limits based on the value of the stuff you want to insure, the personal liability limits you think you need, and your desired temporary living expense allowance.
Lemonade renters insurance includes three core types of coverage:
- Personal Property Coverage. Lemonade protects the contents of your apartment or home — anything not owned by the property owner or considered part of the dwelling itself — against covered perils, such as fire, storm damage, internal water leaks, and theft. You may need to pay a bit extra to add endorsements (aka riders, which are add-on policies for special circumstances) for valuable items like fine art and musical instruments.
- Liability Coverage. Lemonade can help cover the cost of lawsuits due to accidents that happen inside your rented home. It also covers medical expenses for people injured in your home.
- Temporary Living Expenses (Loss-of-Use Coverage). If your rented home becomes unlivable for a covered reason, such as a burst water pipe or fire, Lemonade pays for alternative living arrangements, such as a hotel or apartment sublease.
Condo or Homeowners Insurance
Lemonade offers affordable homeowners insurance for people who own detached, single-family homes and condo insurance for people who own townhomes or condo units in larger buildings. Coverage starts at $25 per month — again, lower than many competitors.
That said, homeowners insurance premiums are more volatile than renters insurance premiums because homes vary so widely in value. If you live in a $1 million home, you have to pay a lot more than $25 per month. But you’re probably used to that.
Your premiums depend on the value of your home’s contents, your liability limits, and your temporary living expense allowance. As with renters insurance, Lemonade makes it easy to customize these variables. You can set a high deductible if you’re willing to pay more out of pocket after a claim or keep it low if you’re willing to pay a higher premium to limit your out-of-pocket exposure.
As with other insurance companies, homeowners and condo insurance premiums also vary based on factors like:
- The value of your home
- The estimated cost to rebuild it after a total loss
- Its age
- Its location
- The age and type of roof
- Its construction type and materials
Like virtually all homeowners insurance companies, Lemonade has escrow arrangements with all major home lenders and mortgage servicing companies. If you want to include your homeowners insurance payment in your monthly mortgage payment — known as “escrowing the payment” — it’s a snap to set up.
Pet Health Insurance
Lemonade offers pet insurance for pet owners who want to offset the cost of their furry friends’ medical care.
Premiums start at $10 per month but vary based on pet-specific factors like species, breed, age, and known medical conditions. Premiums also vary based on your coverage limits and reimbursement percentage (coinsurance percentage).
You’ll get a 5% discount if you have multiple pets on your policy and another 5% discount when you pay your premium annually instead of monthly. So if you have two pets and enough in the bank to cover a three-digit annual payment, Lemonade offers compelling value.
Lemonade’s pet health insurance policies are comprehensive too. They cover:
- Diagnostics like urinalysis, X-rays, MRIs, heartworm tests, and lab work
- One wellness exam per year
- Routine dental cleaning
- Up to three vaccinations per year
- Outpatient services
- Specialty care
- Emergency services, including surgery
- Scheduled surgery
- Inpatient stays (hospitalization)
- Prescription medications and in-office injections
- Unlimited online chat with veterinary medicine experts — which is decidedly not standard in the pet insurance world
And you can customize your policy’s annual coverage limit, deductible, and coinsurance percentage.
Lemonade’s auto insurance policies start at $30 per month. As with other types of insurance, your premiums vary based on factors like:
- Your vehicle make and model
- Your vehicle’s powertrain type — Lemonade customers pay less to insure electric and hybrid vehicles than fully gas-powered vehicles
- Your driving habits and how much you drive each year
- Your vehicle’s age
- Your policy deductible
- Your coverage limits for each type of coverage on the policy — liability coverage and collision coverage often have different limits, for example
- What types of coverage your policy includes — optional coverages like collision and comprehensive coverage cost more
Lemonade’s auto insurance policies come with extra coverages and perks like roadside assistance, towing coverage, and glass coverage. If you drive an electric vehicle or plug-in hybrid, Lemonade covers your charging equipment and offers emergency roadside charging as well. These perks make Lemonade a suitable choice if you want peace of mind on the road but can’t see the value in paying for a AAA membership.
There is one potential deal-breaker for some drivers. Lemonade requires you to use an app to track your driving based on your location. It’s not unusual for car insurance companies to offer discounts for allowing them to track your driving habits (a practice known as telematics). What is unusual is required tracking and the fact that Lemonade uses an app you probably carry when you’re not in your car to track your driving rather than a separate device that plugs into your vehicle.
That presents significant privacy concerns because an app that always knows where you are, well, always knows where you are. No matter how closely Lemonade guards it, there’s always a chance this information can fall into the wrong hands. So if you’re uncomfortable with required phone-based location tracking, Lemonade car insurance might not be right for you.
- How much coverage you need (your death benefit) — coverage ranges up to $1.5 million, higher than many no-exam providers
- Your age when you apply — policies are available to applicants between the ages of 18 and 60, which is a bit older than some other no-exam providers
- Your policy’s term — options range from 10 years to 30 years, with lower premiums for shorter terms
- Your personal and family health history
- Your personal health history, including any known medical conditions
Premiums remain level for the entire term. Your policy only pays out if you die while it’s in effect. Otherwise, it expires worthless when the term ends or you stop paying your premiums.
One drawback of Lemonade life insurance is that there are no permanent life policies, such as whole life. If you’re looking for lifelong coverage, Lemonade won’t work for you.
All Lemonade term life insurance policies are underwritten by the North American Company for Life and Health Insurance, which has been in business for 130 years and counting. So while Lemonade is relatively new, you can take solace in knowing that it’s backed by a company older than any human on Earth has been alive.
Additional Features of Lemonade Insurance
Choosing an insurance company isn’t all about the plan types and cost. You also want to know what else you can expect from your experience with the company.
Lemonade makes it easy to get coverage with a quick, all-digital application process. The company says it takes just 90 seconds to apply. And while I can’t vouch for the exact amount of time because I didn’t time it, I can confirm it’s quick. My quote for homeowners insurance definitely didn’t take long. I just answered a series of easy questions, and it gave me a quote.
Lemonade has an approachable application process led by Maya, its AI onboarding personality. Whichever type of insurance you’re applying for, Maya leads you through the process with a series of easy-to-understand questions.
The whole thing takes only a few minutes, which is much faster than traditional insurance applications. If you’ve been putting off applying for insurance because you can’t spare the time, Lemonade is perfect for you.
Not all Lemonade insurance products are available everywhere.
Term life insurance is the most widespread. It’s highly likely Lemonade sells it in your state. Other types are more hit or miss. For example, Lemonade homeowners insurance is available in 23 states plus the District of Columbia as of August 2022. That’s a problem if you want to bundle as many policies as possible with Lemonade.
To be fair, Lemonade is still a young company, and it continuously adds new markets. But check Lemonade’s Where We’re Live page to see if the product you need is available in your state. If it’s not available, you can sign up for a notification when it launches.
If the worst happens and you have to file a claim, it doesn’t take much longer to file one of those than it does to sign up for insurance — just three minutes, according to the company. I haven’t filed a claim, but since the application process lived up to the hype, I have no reason to doubt the claims process does too.
Everything flows through the app — claim reporting, documentation, communication with claims adjusters, claims decisions, and even appeals if it comes to that.
The Lemonade app is user-friendly and not as glitchy as some competitors’ apps, which feel more like afterthoughts. Lemonade was designed around an app, so it just works.
Lemonade’s Giveback program puts a portion of the premiums you pay for insurance toward the charity of your choice. Here’s how it works:
- Each Lemonade policyholder chooses a charity they care about when applying for a policy
- Lemonade takes a flat fee out of your premium to pay itself for administering the insurance
- Lemonade pays out claims using premiums paid by customers
- At the end of the year, Lemonade sends whatever’s left over to its customers’ charities
Lemonade plants trees to help offset the carbon its auto insurance policyholders generate by driving. It doesn’t promise a 100% offset, but it does use your location information to calculate your car’s approximate annual carbon footprint. Lemonade then uses that information to determine how many trees to plant to at least partially offset your emissions.
Is Lemonade Legit?
Yes, Lemonade is legitimate.
Sure, the brand has only been around for a few years and isn’t a household name like Geico or New York Life. But its financials are strong and it’s a publicly traded name (NYSE: LMND), which means any would-be policyholder can do their due diligence on the company before buying a policy.
And Lemonade’s life insurance coverage is underwritten by the North American Company for Life and Health Insurance, a 130-year-old insurer that’s in excellent financial shape and has no plans to go anywhere.
Advantages of Lemonade Insurance
Lemonade is an affordable, user-friendly insurance company. It’s fun to work with and suitable for people from all walks of life. And it has some clear advantages.
- Wide Range of Insurance Products Available. Lemonade home insurance for your dwelling and its contents, Lemonade car insurance for your vehicle and liability on the road, Lemonade pet insurance for your pet’s medical bills — it’s quite the portfolio. And you can create a custom bundle to save even more.
- Super-Fast Application Process. Lemonade’s AI-led application process is fast and easy. No paper applications or long, boring phone conversations with agents eager to upsell you.
- Very Low Premiums. Lemonade stands out for relatively low insurance costs despite impressively comprehensive coverage options. For example, renters coverage starts at just $5 per month, and term life coverage starts at just $9 per month.
- Fast Claims Process. Lemonade makes the insurance claims process easy, if not fun. Everything goes through the user-friendly Lemonade mobile app with minimal human interaction. And it has some impressive claims stats if it does say so itself.
Disadvantages of Lemonade Insurance
Lemonade has a few notable downsides for some would-be policyholders. They may not affect some, but they may be deal-breakers for others.
- Relatively Low Maximum Coverage Amount for Life Insurance. Lemonade’s life insurance coverage tops out at $1.5 million. That’s enough for most people, but if you’re a high earner or have significant debts and living expenses, you probably want more.
- Not Available Everywhere. Lemonade offers insurance coverage in most states, including big ones like California, New York, Florida, and Texas. But not all Lemonade products are available in all states, so you might not be able to build as comprehensive a bundle as you’d like.
- Lemonade Auto Insurance Requires Location Tracking. Lemonade’s requirement that car insurance customers share their location while driving is a legitimate privacy concern. If you’re uncomfortable with Lemonade knowing where you are at all times, Lemonade car insurance isn’t for you.
Alternatives to Consider
Lemonade offers five different types of insurance. It has a lot of competition for each. So if you’re not positive Lemonade is the best choice for your insurance needs, consider these alternatives.
|Insurance Company||Best For|
|State Farm||Whole life insurance|
|Geico||Low-cost car insurance|
|Amica||Low-cost renters insurance and excellent bundle discounts|
|Embrace Pet Insurance||Comprehensive (though slightly more expensive) pet health insurance|
Lemonade stands out thanks to low premiums, easy application and claims processes, and solid bundle options.
If you’re in the market for a new insurance company, Lemonade is worth a closer look. But first, ensure it offers the type of insurance you want in your home state, and think carefully about whether its benefits make up for its shortcomings. If not, check the chart above to find an alternative that better suits your needs.