Lemonade Homeowners Insurance Review 2020

Despite its user-friendly website and mobile app, incredibly easy signup process and competitive pricing, there are some drawbacks to Lemonade.

J.D. Power Rating
5/5
AM Best Rating
N/A
BBB Rating
N/A
SimpleScore
3.6 / 5.0
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SimpleScore Lemonade 3.6
Discounts 1
Coverage Options 3
Customer Satisfaction 5
Support 4
Accessibility 5

Lemonade offers homeowners, renters and pet insurance that relies on technology to underwrite insurance policies and process claims.

Lemonade uses artificial intelligence (AI) to make the fastest claims decisions in the world, topping out at three seconds. Some claims are handled instantly and the rest are handled by a team of professionals dedicated to resolving claims. Lemonade’s mobile app even has an almost 5-star rating on both the App store and Google Play.

The company offers homeowners insurance,renters insurance and pet insurance. Customers who have an existing homeowners or renters insurance policy with Lemonade can also sign up for pet insurance at a discounted price. Lemonade is currently available in about half of the states in the U.S., but has active plans to expand operations to additional states in the future.

In this article

    How does Lemonade Insurance work?

    • Lemonade offers low-cost homeowners insurance made easy online.
    • Limited to a few select states, though high ratings in those states.
    • Automatic claims processing on up to 30% of its claims.
    • Lemonade gives back to charity when certain financial requirements are met.
    • Lemonade Insurance reviews are mostly positive.

    Find the Best Home Insurance

    Save money on home insurance with our simple comparison tool.

    Matching you with providers.
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    Click at least 2-3 companies to find the very best rate.

      America’s top-rated home insurance

      • Policies starting at just $25/month
      • Sign up in seconds, claims paid in minutes
      • Zero hassle, zero paperwork

      Lemonade homeowners insurance overview

      Price Starting at $25/month
      Best For People who want basic, affordable coverage for their homes and property
      Not For People who prefer to bundle their policies for discounts

      The claim

      The innovative new company, Lemonade Insurance, promises to change the game with their new homeowners insurance policies. It claims that it offers “instant everything” — taking only 90 seconds to get insured and three minutes to get paid for a claim. It also claims to have some of the lowest starting prices for homeowners insurance, starting at just $25 per month.

      Is Lemonade’s claim true?

      Sort of. Lemonade Insurance falls a little short on some of its claims, and it’ll even admit it. Overall, the company has a very high customer satisfaction rate, which lends a lot of credibility to the company. While it does take only a few seconds to get insured, it only instantly approves 30% of its claims. That means over half of the claims require a manual override to get approved. This falls short of “instant everything” by a long shot. Starting prices are some of the lowest in the industry — homeowners insurance starts at only $25 per month. The company will even help you switch to Lemonade by helping you cancel your old insurance.

      Our deep dive

      Lemonade makes insurance policy accessible to everyone. Some of the coverages and perks include:

      • Flexible insurance plans: You can adjust your coverage with Lemonade so that you are only getting the coverage you need, or getting the coverage you want. Adjustments can be made to your liability insurance as well as your property coverage. If you have more valuable items in your home, you want higher property coverage limits. There is even a separate coverage, in certain locations, for electronic devices like your laptop or smartphone so your property coverage isn’t depleted with those items.
      • Lowest monthly prices available: Homeowners insurance starts at $25 per month and goes up from there depending on what coverage limits are selected.
      • Quick insurance policy: Boasting an approval time of 90 seconds, Lemonade offers a fast signup application so you can get started with your insurance policy in a matter of minutes. This will require some information from you, like personal information, so try to have that handy when you get ready to sign up for their insurance.
      • Easy mobile app: With all of the modern conveniences, Lemonade offers a mobile app that is very user-friendly. You can sign up for insurance through their app, file claims through the app and even upload photos of your loss through the app. It’s very comprehensive, designed with you in mind.
      • Instant claims approval: Though only 30% of claims are approved instantly, most claims are paid quickly. Any claim that isn’t automatically approved by their AI technology will be approved manually by a professional team. Claims can still be paid in as little as three minutes.
      • Giveback: Lemonade has a unique platform in that they operate differently from other insurance agencies. Rather than keeping all of the profits, Lemonade keeps a flat fee to cover expenses, reinsures the rest of the money and whatever is left is given back to charity.
      • Giveback program: Lemonade lets its insured customers choose charities that the company will donate its profits to. You can pick a charity when you sign up with Lemonade, and every year they send the unclaimed money to the charity of your choice. Donations are limited to 40% of its income, but that’s a pretty big donation either way.

      Lemonade homeowners insurance cost rundown

      Lemonade Insurance will have different prices for everyone since no two people or homes are the same. Construction material may be a factor in your insurance premiums, as well as your location, size of your home and the coverage limits you select for your property. 

      If you can afford the higher coverage limits, you should definitely purchase them. This will ensure that all of your physical property is covered in the event of a flood, fire or theft. (A side note: flood insurance is separate coverage provided by the National Flood Insurance Program. Ask about it if you live in a flood-prone area.) However, don’t purchase more coverage than you need or you’ll be throwing away your money on insurance that doesn’t have any benefit.

      To determine how much coverage you need, there are some things to consider. One important consideration is how much property you own. To determine this number, do a physical inventory of your whole home. Make a list of everything you own, then find approximate retail values for them. Once you have a total of what everything in your home costs, you can then choose insurance coverage that will fit that limit. You may be surprised at how much everything in your home is worth!

      One last thing to note: you may not have a lot of flexibility with your liability limits, but that’s okay. If anything is going to be high, you want it to be the coverage you need in case someone gets hurt at your home. If you have a dog or other pet, you may want to consider increasing your liability insurance in case of a bite.

      Alternatives to Lemonade

      Shop around

      When you get a quote from Lemonade, we recommend shopping around and getting quotes from other insurers. To compare prices accurately, make sure to choose the same coverage limits for property and liability that you choose with Lemonade. However, once you have a base premium and know which option is best for you, then you can choose a company that has additional coverage in line with what you need. Compare prices carefully and read the fine print. You want to make sure what natural disasters and events are covered under your policy.

      Compare coverages

      If you choose to invest in homeowners or renter’s insurance, you want to be sure your coverage covers everything you need it to cover. For example, if you have a dog that bites someone, that can cost upwards of $75,000 per incident. The standard liability amount is $100,000, which would cut it close with a dog bite. If you have multiple dogs, or dogs that interact with people frequently, it may be wise to increase your liability coverage in case something does happen with one of them.

      Take some time to do some research and work out the numbers for yourself. Keep in mind that if you have a mortgage, you may be required to have insurance, especially for liabilities. A homeowners insurance policy can save you money when it comes to things like a leaking water heater or busted pipe. And if you choose not to go with insurance, make sure to put enough money aside to handle any property damage you incur.

      Find the Best Home Insurance

      Save money on home insurance with our simple comparison tool.

      Matching you with providers.
      We found results in
      Click at least 2-3 companies to find the very best rate.

        America’s top-rated home insurance

        • Policies starting at just $25/month
        • Sign up in seconds, claims paid in minutes
        • Zero hassle, zero paperwork

        Have an emergency fund

        If you would rather not purchase homeowners insurance, you’ll need to take some steps to protect yourself and your property. The first thing we recommend is to start an emergency fund or savings account. You’ll want to put money up every month, rather than paying monthly premiums, so that when something does happen, you can cover the expenses. This is especially important if you have a pool or a dog, which are common liabilities that can cost a lot of money to a homeowner or renter.

        The competition

        There are a lot of options on the market for homeowners and renter’s insurance. Lemonade Insurance is a great choice for people who don’t need to bundle their policies and only need basic coverage. But what if you want additional coverage for your business, or you want to protect your hedges? If you want a different kind of company, try out one of these competitors:

        • Allstate: One thing Allstate has everyone beat in is its optional coverage and discounts. With Allstate, you can get optional coverage for water backups, yard and garden property (including landscaping), and business property, among other things. Discounts include a welcome discount, a discount for theft or fire protection and discounts for safety features on your home, like hail-resistant roofs and storm shutters.
        • American Family: American Family offers fairly basic coverage for homeowners insurance, but it offers some additional optional coverage options that may be more beneficial to some homeowners, like credit theft protection and matching siding coverage. The company also offers additional coverage options for its renter’s insurance policies.
        • Assurant: If you just need renter’s insurance, and don’t need a policy for a home or a car, Assurant is a great choice with competitive prices. Assurant only offers renters insurance, so it is a specialist in that area. This is a great choice for apartment dwellers, and you can get connected to Assurant through other insurance providers or through their website directly.
        • Nationwide: Nationwide is a great choice for people who want to bundle their homeowners insurance with their auto policies, pet insurance and personal umbrella policies. Nationwide offers plenty of additional coverage options, like flood insurance and replacement cost coverage. If you want a full-service insurance provider, Nationwide may be the right fit.
        • State Farm: State Farm is one of the leading providers of insurance in the United States, and it has the ratings to prove it. What it doesn’t have is a comprehensive overview of additional coverage options and discounts offered. You’ll need to speak to an agent for the best quotes with State Farm.

        What Others Are Saying

        • Forbes touts the benefits of automation and technology in its review of Lemonade’s insurance policies. Forbes also highlights the high marks Lemonade received from customer reviews. Forbes says of the agency, “Automation also allows Lemonade to offer policies at a very low price: renters insurance starting at $5 a month and homeowners starting at $25.
        • Inc.com highlights Lemonade’s technology and company culture, but points out some of the complications with an automated claims process. “This approach works only in the simplest situations,” says David Paige, an attorney who has spent 28 years representing and advising insurance companies. “I think the only people who will respond favorably will be the people who have a very uncomplicated property claims with relatively low dollar amounts.”

        Methodology

        SimpleScore

        The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.
        For every review, our editorial team:

        • Identifies five measurable aspects to compare across each brand
        • Determines the rating criteria for each aspect score
        • Averages the five aspect scores to produce a single SimpleScore

        Here’s a breakdown of the five aspect scores and their rating criteria for our reviews on home insurance.

        Why do some brands have different SimpleScores on different pages?

        To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

        However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare State Farm’s home insurance according to our criteria for the best home insurance, it scores a 3.8 out of 5. But when we compare State Farm according to the criteria for the best auto insurance, it scores higher, since the features the company offers can vary by the type of insurance.

        Discounts

        We looked at the number of discounts each company offers – more discounts mean a higher score.

        Coverage Options

        We awarded higher scores to the companies that offer more coverage options.

        Support

        We awarded higher scores to companies with the most channels for customer support.

        Customer Satisfaction

        We leveraged the J.D. Power 2019 Home Insurance Satisfaction Study℠ to see how customers rated their experience with each company. (If a company wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

        Accessibility

        We looked at the level of accessibility of each company – the more resources they have the higher their score