Lemonade Homeowners Insurance Review
Lemonade is an all-digital, app-based homeowners insurance company geared toward younger homeowners and renters in urban areas. Unlike traditional insurance companies, Lemonade relies on AI to set rates and evaluate claims â€” it doesnâ€™t operate any physical agencies. As a result, itâ€™s able to offer exceptionally low rates and speedy claims payments for certain customers (coverage and rates vary widely from person to person).
Lemonade also adds an extra level of transparency to the insurance process by showing where every premium payment goes. The company takes a flat fee to cover operating costs, uses whatâ€™s necessary to pay claims, and donates anything leftover to charity.
Get the full story on how Lemonade insurance works here
Whether or not Lemonade is right for you depends on your coverage needs, location, and (of course) personal preference. Itâ€™s worth keeping in mind that while Lemonade makes home insurance exceedingly simple, itâ€™s almost exclusively digital. Customers who prefer to talk through their insurance needs in person or over the phone wonâ€™t have that option.
Lemonade Insurance is â€œfast, easy, and unconflicted, meaning no conflict of interest in paying claims,â€ says Yael Wissner-Levy, Lemonadeâ€™s VP of Communications. â€œ[It] lets you support charities you love, simply through your insurance policy! You may just fall in love with your insurance company.â€
Is it true?
Thereâ€™s definitely a lot to love about Lemonade. No other insurer weâ€™ve reviewed is as approachable or makes policy management so simple. Lemonadeâ€™s prices are also very competitive for many customers. These perks can be especially appealing to people buying home insurance for the first time, which is a big part of the reason why Lemonade is popular among apartment dwellers and young homeowners.
â€œMany landlords now require tenants to carry renters insurance, and Lemonade makes it quick and easy for tenants to sign up for a policy within minutes,â€ says Jennifer Okhovat, a Realtor at Compass in Los Angeles, California. Okhovat herself is a Lemonade policyholder and confirms that sheâ€™s been â€œvery pleasedâ€ with her rates and coverage.
However, one company is never best for everyone. Depending on location, age, and value of your home, Lemonade may end up being more expensive than other popular companies. Its coverage is also a bit less customizable, with many coverage levels coming preset and fewer endorsements available as you might see from a big-name insurer.
The other potential drawback is Lemonadeâ€™s lack of human customer support. â€œOne thing that can be frustrating is not having a â€˜live representativeâ€™ or a phone number to call into,â€ says Okhovat. But she adds, â€œSo far, I have not had that issue. I love the responsiveness of the app and the pricing that I am offered. It’s all a personal preference.â€
- In business since: 2016
- Financial strength rating: NR (not rated)
- B-corp certified: Transparent, accountable, socially and environmentally sound
- Policy types: Homeowners, renters, condo, and co-op insurance
- Pros: User-friendly, generally affordable, donates unused premiums
- Cons: Not available everywhere, coverage upgrades are limited
Learn what Lemonade insurance covers (and what it doesn’t)
User-friendly insurance interface
Researching and buying insurance with Lemonade is ultra-simple. It handles all quotes and applications online, without ever putting you on the phone with an agent, which means you can get covered in just a few minutes. â€œOrder a cup of coffee, start the Lemonade process, and by the time your coffee is ready, youâ€™re insured,â€ says Wissner-Levy. Lemonade also eschews the traditional, often-confusing insurance lingo in favor of direct language shoppers can readily understand. This makes it easier to learn what your policy does and doesnâ€™t cover and what you might want extra protection for.
When asked about the benefits of insuring with Lemonade, Hamill says that â€œLemonade insurance is inexpensive. Renters insurance starts at $5 per month, while homeowners policies start at $25 per month.â€ $25 per month comes out to $300 per year for homeowners insurance. By contrast, the average rate for home insurance in the U.S. is just over $1,100, according to the National Association of Insurance Commissioners. Remember that prices vary a lot by customer â€” but if Lemonadeâ€™s other perks appeal to you, itâ€™s worth getting a quote to see whether this company could help you save.
Donates unused premiums
One of the key differences between Lemonade and other insurers is its Giveback program. Giveback donates leftover premiums â€” the amount not used for overhead costs or claims â€” to a charity of the policyholderâ€™s choice. This gives customers clarity about where their payments are going and also eliminates any incentive for Lemonade not to pay out on home insurance claims. In theory, this means that the claims process will be faster and less frictional that it might be with another company.
Not available everywhere
Lemonade is currently only available in select states. However, itâ€™s expanding rapidly with plans to cover more states within the year. You can track Lemonade’s availability here.
Coverage upgrades limited
Lemonadeâ€™s coverage is a little less flexible than that of many big-name insurance companies. There are not a ton of add-on coverage options; for example, earthquake insurance is limited to two states, and we didnâ€™t see add-ons for things like green home rebuilding materials.
â€œIf I were buying insurance, I would take a close look at the coverage limits,â€ says Virginia Hamill, Senior Insurance Analyst at FitSmallBusiness.com. â€œThe quote I received included $100,000 for personal liability â€¦ A lawsuit could go through that pretty quickly, so it might not be enough coverage in some situations.”
Be sure to carefully review Lemonadeâ€™s policy options against your coverage needs and make sure it offers enough protection for you before buying.
*Customer complaints recorded by the NAIC and weighted according to companiesâ€™ market share. Two of Hippoâ€™s three underwriting companies have more customer complaints than the national median.
Lemonade vs. Hippo
Lemonade and Hippo are both bent on modernizing homeowners insurance, but theyâ€™re taking different approaches. Lemonade focuses on mobile tech to facilitate shopping, claims, and service, while Hippo specializes in smart tech as a way to prevent claims.
Most Hippo insurance policies come with a free smart sensor kit, meant to help homeowners identify and fix issues like leaks and break-ins before they ever become cause for a claim. Hippoâ€™s coverage is also a little more tech-friendly, with specialized protection for things like home office equipment, appliances, electronics, and smart home upgrades.
Service-wise, Lemonade is digital-first, while Hippo relies on good-old-fashioned customer support. Instead of handling claims through an app, like Lemonade, Hippo uses the traditional method of assigning a human insurance professional to each case. Your preference for digital versus in-person interaction might help determine which of these companies is a better choice for you.
Note that Hippo only offers homeowners and condo insurance. Lemonade rounds out offerings with renters and co-op insurance, making it a little more widely available. Both companies currently operate in select states, so be sure to check Lemonadeâ€™s availability and Hippoâ€™s availability before settling on either one. As always, itâ€™s also smart to compare quotes and see which company offers better value on the coverage you need.
Lemonade vs. State Farm
If youâ€™re looking for a more â€œestablishedâ€ homeowners insurance company than Lemonade, State Farm is a good place to start. State Farm is the biggest homeowners insurance company in the U.S., covering almost one-fifth of the nationâ€™s homeowners. It also has a rock-solid financial rating (A++) from leading industry analyst A.M. Best.
As for claims handling, State Farmâ€™s claims satisfaction score is only â€œaverage,â€ according to J.D. Powerâ€™s customer survey. Lemonade has not yet been rated by J.D. Power respondents, though it has almost no customer complaints filed with state insurance commissioners, which is unusual.
Lemonade might be a cheaper insurance option than State Farm for some homeowners and renters. However, State Farm has the advantage of being available nationwide, and it offers hands-on customer service at local agencies for customers who prefer face-to-face interaction.
Lemonade vs. Geico
Geico, like Lemonade, is known for being affordable. Customers who already insure their car through Geico might be able to get steep price cuts through bundling. However, thereâ€™s one big caveat: Geico doesnâ€™t actually sell its own homeowners insurance. Instead, it repackages and sells policies underwritten by other insurers, like Travelers and Liberty Mutual. That means coverage options and discounts can vary widely for Geico customers.
Both Geico and Lemonade are digital-friendly. Although Geico doesnâ€™t operate exclusively online or through apps, like Lemonade, it did earn the highest score in J.D. Powerâ€™s 2019 Digital Insurance Experience Study. That might make it a good compromise for customers who want a mobile-first experience but feel wary of a newfangled insurer like Lemonade.
Lemonade Homeowners Insurance FAQ
Is Lemonade insurance legit?
What is peer-to-peer insurance?
Does Lemonade insurance have a phone number?
Can you get Lemonade insurance without a smartphone?
Can you cancel Lemonade insurance?
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