Lemonade Insurance Review: For When Life Hands You Lemons
Lemonade offers affordable, fast, and easy insurance to homeowners and renters for property theft, damage, and more. Read about Lemonade Insurence in our in-depth review
- Transparent policies
- Fast, easy claims processing
- Affordable homeowners and renters insurance
Lemonade is stirring up a lot of commotion “reversing the traditional insurance model.” Its homeowners’ insurance model really does something revolutionary with its services. Shifting the focus from revenue to benefits, it’s a combination of innovative technology, flexible policies, and modern thinking. Not sure what that all means? Let me show you what Lemonade is all about.
Pros and Cons
- Affordable homeowners and renters insurance — epending on your needs and where you live, you might only pay as little as $5 per month.
- Transparent policies — Easy to understand and just as straight-forward as it sounds.
- Fast, easy claims processing — File a claim via app or online; Lemonade reviews claims instantly with a quarter of claims paid out in less than 3 seconds.
- Only available in certain states — Lemonade is currently available in about 20 states including Washington, D. C. but may soon be available in 28 more states.
- No bundled insurance options — Lemonade only offers homeowners and renters insurance, no auto insurance.
How Does Lemonade Peer-To-Peer Insurance Work?
Lemonade is a peer-to-peer insurance provider. That means people pay their premiums into a communal pot, and claims are covered by the money that’s in the jar.
The peer-to-peer model has recently expanded to several areas throughout the industry, with companies like Prosper and LendingClub offering specialized social loans. This P2P model is certainly a refreshing twist to the gray and outdated insurance industry.
That’s already vastly different than the standard every-man-for-himself model, but Lemonade goes further. Traditionally, insurance companies tried to lure you to pay the highest premiums possible because that meant more money in their pockets. Then, they’d use red tape and hidden terms to deny your claims because the less money paid out in claims, the more revenue the company gets to keep.
The most amazing feature of Lemonade’s business model is this: After covering expenses, updating technology, and paying employees, Lemonade will donate leftover money to charity.
This is a really unique, innovative way to make sure that you and your insurer are not on opposite ends of a battlefield.
If you have a claim, a traditional insurer is incentivized to fight you, because if it doesn’t pay that claim, it will pocket that money as profit. Lemonade won’t get that money in any case because it will be earmarked for charity. We’ll dig deeper into this Giveback Program later in the article.
A Millennial Approach
Lemonade embraces technology unlike other insurers. Whereas traditional insurance companies offer plans that I might liken to a dial-up modem, Lemonade services are more like high-speed mobile internet. You can sign up for everything via the mobile app or online, make claims, and receive reimbursements without ever leaving the couch.
Claims are also automated for faster turnaround. You just upload a video of the damage, and Lemonade reviews the claim instantly. After approval, you’ll have the money transferred to your account so you can replace the item or have the property damage repaired. What people really love about Lemonade is the speed with which claims are processed. In fact, a quarter of claims are paid out in under 3 seconds!
What Does Lemonade Cover?
Lemonade coverage is pretty exhaustive, especially for the price. Generally, Lemonade can cover everyone in your home (all relatives included for no additional cost) excluding roommates who are not related to you, and all of your belongings even if they’re not in the house at the time of damage. Here’s what you can expect to be covered with a Lemonade homeowners/renters insurance policy:
If damage is done to your home, insurance covers the cost to repair those covered damages.
Personal Property Damage
Lemonade also covers damage or destruction of any personal items.
Personal Property Theft
You’ll be reimbursed if your personal property is stolen, and what’s even more impressive is that items are covered regardless of where the item is (in your home, outdoors, in France!).
Other Person Liability
Lemonade covers medical expenses and legal fees when another person is injured and you are held responsible. This also refers to injuries sustained on your property for which you are held liable.
Loss of Use
Is Lemonade Worth the Cost?
Easily one of its most prominent features is the low-cost of having Lemonade insurance. When compared to the competition, Lemonade wins hands down in the rates department. No matter which policy and competitor I compared it to, Lemonade was at least $10 cheaper, and more often than not it was $200, $300 or even $400 less.
Not only does it boast the lowest rates, but you can adjust your deductible at any time to increase or decrease your premiums. They’re inversely proportional, so if you pay more of a deductible, you’ll pay less premium.
Lemonade also offers discounts for good credit or owning an alarm system, smoke detectors, or home monitoring system. Don’t have a fire alarm or security system? Lemonade will give you a discount on your premiums even if you live within close proximity to one of the major defense departments like a fire station or police department.
Coolest Lemonade Features
Lemonade’s Zero Everything policy is great for people who have a lot of smaller items they want insured. This policy waves the deductible for claims made in exchange for a slightly higher premium. Let’s say your $350 tablet breaks. With a $100 deductible, you’ll get $250 to have it replaced. With Zero Everything, you’ll get the full $350 (after paying a higher premium). And unlike many insurers, Lemonade won’t increase your rate if you make two claims or less annually.
Extra Coverage and Add-Ons
Lemonade allows you to increase your coverage limit for more valuable items. For example, standard coverage limit for jewelry insurance is $1,500. However, you can expand your coverage, so the limit for that same item rises to an impressive $50,000. Such high limits for expanded coverage is a unique feature that you won’t easily find with Lemonade’s competitors. Coverage also applies to belongings stored in an outdoor unit. Items eligible for additional coverage include artwork, jewelry, bikes, musical instruments, and more.
With the sleek Lemonade app, you can request a quote, sign up and even file claims on the mobile app, making the entire process streamlined and so much faster than anything I’ve ever seen in the insurance industry (not to mention convenience you won’t find anywhere else). You can also tailor your coverage options and immediately apply changes via the app.
What’s This About Charity?
Anyone who likes the idea of big corporations giving back will appreciate Lemonade’s Giveback Program. This initiative lets Lemonade customers pick charities to donate their premiums to. Here’s how it works:
- Lemonade takes a flat rate percentage (20% to be exact) to cover salaries, costs, etc.
- Another percentage goes back to purchasing reinsurance coverage
- The rest goes towards claims
Now, here is where the charitable donations come in. If there is money left over in the claims pool, that remainder will go to charity. In the first year of the program, Lemonade gave away an unbelievable 10.2% of its annual revenue to charity through the Giveback Program.
Sounds too good to be true? Well, you can stop pinching yourself because Lemonade is the real deal. So, what’s the downside to this up and coming insurance model? For one thing, Lemonade isn’t available everywhere, yet. Coverage is an option only if you live in the following states:
- District of Columbia
- New Jersey
- New Mexico
- New York
- Rhode Island
Live anywhere else, and you’re out of luck. Lemonade has promised to roll out several more coverage states within the year, though. Another downside to Lemonade’s coverage is that it only includes homeowners and renters insurance. You can’t bundle your auto insurance into a package deal to minimize your insurance expenses, for example. If that’s your goal, you should look elsewhere
Lemonade Insurance is coming soon to:
Alaska, Alabama, Delaware, Florida, Hawaii, Idaho, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maine, Minnesota, Missouri, Montana, North Carolina, North Dakota, Nebraska, New Hampshire, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, Vermont, West Virginia
Lemonade Peer-to-peer insurance is a refreshing take on the more stagnant insurance model. The company has found a really unique way to make sure it’s not incentivized to cheat you (the money it has leftover goes to charity instead of to its own pocket). It offers a quality service that makes homeowners insurance affordable to everyone. Strong financial health and outstanding customer feedback give new customers all the encouragement they need to trust in this company.
Lemonade’s Giveback Program, smart mobile app, and easy claims process are just more reasons to support this service. What’s more, with excellent rates, a wide range of coverage, and useful add-ons, the company has definitely turned lemons into lemonade. Check out how easy it is to sign up for Lemonade now.