Lemonade Homeowners Insurance Review

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Lemonade Homeowners Insurance Review

Lemonade’s home insurance solutions are simplistic and catchy, and they guarantee the customer’s ultimate convenience, all the while ensuring positive social impact. Take everything you know about traditional insurance models, toss it out the window, and start with a blank slate that lets you decide what, when, and how your home insurance model will work for you and your community. That is Lemonade homeowners insurance.

One of Lemonade’s core strengths is its promise of transparency. With many traditional insurance providers, customers know what they are paying for in premiums but are left wondering what happens to the money they don’t get back in claims. Although this lack of transparency seems fairly normal, Lemonade offers a different approach.

Lemonade provides homeowners the ability to know the cost of premiums, how much of that goes toward Lemonade’s expenses, how much can be used for paying out homeowners insurance claims, and how much will be donated through Lemonade’s annual Giveback program. Lemonade currently isn’t rated by many of the biggest financial strength-rating agencies, but its digital-first approach and commitment to transparency is promising if you’re looking for an innovative homeowners insurance solution.

Pros Cons
Fast and easy claims processing
Transparency
Zero Everything option
B-corp certified
No bundle options
Currently only available in 23 states
Not rated by financial rating agencies

The Homeowners Insurance Factors We Analyzed

Pricing

Lemonade’s pricing varies based on a variety of factors, including geographical location. Home insurance rates begin at $25 per month, but your premium will vary based on your individual profile. If you are interested in the rate you will qualify for, we recommend visiting Lemonade’s pricing portal, where one of its AI bots will ask you 10 questions, followed by an immediate quote to your email address.

Customer experience

Customer experience is the hallmark of the Lemonade homeowners insurance brand. As a web-based insurance company that uses artificial intelligence to ensure accurate rates and lightning-fast claims processing, Lemonade has figured out what today’s insurance customers truly need.

Though it are not yet rated by J.D. Power, Lemonade had fewer complaints than average registered with the National Association of Insurance Commissioners (NAIC) in 2018.

Coverage

Lemonade’s home insurance coverage is pretty all-encompassing. Here is a quick breakdown of the coverage you can expect:

  • Damage or destruction of the home: If your home is damaged or destroyed, a Lemonade AI bot will determine the current cost to reconstruct the home. That amount will be covered by your policy. Additionally, if you have to leave the home for reasons covered by the policy, Lemonade will cover your additional living expenses.
  • Damage or destruction of personal property: If your personal property is damaged or destroyed, whether inside or outside of the home, the full replacement value of those items will be covered.
  • Personal liability protection: If someone in your home or on your property is injured and you are held responsible, your Lemonade policy will cover their medical expenses and legal fees.
  • Theft of personal property: Regardless of the location of your personal property, if it is stolen, you will be fully reimbursed.

Before you seek your Lemonade quote, we recommend making a list of all of your personal property and its value.

Deals, discounts, and add-ons

Unlike some competitors, Lemonade offers extra coverage options for items that are valued above standard coverage limits, like expensive pieces of artwork that are valued well above standard coverage limits.

Lemonade also offers a very unique option called Zero Everything. This is a zero-deductible option that allows you to make up to two claims per year with no deductible and no rate increase. With Zero Everything, if your home experiences water damage from a burst pipe, you will receive full replacement cost after the claim is approved with no out-of-pocket cost.

If you live in a coastal area prone to hurricanes, don’t forget to ask your Lemonade agent about a hurricane deductible. This is not something that comes as part of their standard policy, but it can be added on. This deductible works much like a normal deductible but only becomes payable in the event that there is a claim resulting from hurricane damage.

Lemonade Home Insurance Overview: Financial Strength, Availability, and History

While Lemonade isn’t rated by any of the financial strength rating agencies we usually rely on (AM Best, S&P Global, and Moody’s), it did earn a financial stability rating of A from Demotech, Inc., a financial analysis firm. This exceptional rating makes sense when considering Lemonade’s cost model and the fact that it is reinsured by some of the industry’s largest brands.

In addition, Lemonade is what is known as a B-Corp or public benefit corporation, which means that Lemonade is “legally permitted” to consider the interests of all constituents, not solely the interests of its owners. It is held to “rigorous standards” of social and environmental performance, accountability, and transparency. Additional information about its B-Corp rating can be found on its FAQ page here.

  • In business since: 2016
  • S&P Global financial strength rating: N/A
  • Moody’s financial strength rating: N/A
  • AM Best financial strength rating: N/A
  • States served: 23 plus Washington, D.C.

The Competition

AM Best financial strength rating
J.D. Power 2019 U.S. Home Insurance Study Score
J.D. Power 2019 U.S. Property Claims Satisfaction Study Score
NAIC Customer Complaints
Lemonade
N/A
N/A
N/A
Fewer complaints than average
Hippo
N/A
N/A
N/A
N/A
State Farm
A++
4/5
3/5
Fewer complaints than average
Geico
A++
N/A
N/A
Close to no complaints

All information accurate as of January 27, 2020.

The Bottom Line

Lemonade provides quality home insurance through an innovative digital-first model. Though it is a for-profit organization, B-Corp status helps to ensure customer and community well-being is at the forefront of everything it does. Lemonade’s commitment to positive social impact through the Giveback Program is only a small part of its overall mission to “transform insurance from a necessary evil into a social good.”

If you are seeking comprehensive home insurance and the convenience of obtaining it via the internet, Lemonade may be the perfect choice for you. However, we always recommend comparing quotes from a few different companies; the best homeowners insurance company for you will depend on available coverage and final quote.

Lemonade Homeowners Insurance FAQ