Lemonade is a relatively new player in the homeowner’s insurance market and is focused on technology-based account management. The company incorporates artificial intelligence into claims processes, potentially making it a popular choice for young adults. The company’s fast claims payments is one of its standout features.
Lemonade is upending the traditional insurance business model by taking a flat fee for its services and donating the surplus to various causes. While this technologically-forward company isn’t right for everyone, we encourage you to check our Lemonade homeowners insurance review to decide if it will fulfill your needs.
Lemonade is part of a group of new digital insurance companies that leverage technology to improve processes and customer experience. Since Lemonade homeowners insurance has only been available for five years, many of the major rating companies have not yet published scores on the company. However, a smaller rating company that focuses specifically on insurance companies, Demotech, Inc., gives Lemonade an A (Exceptional) rating for financial stability.
- Fast claims processing:
- The company uses artificial intelligence and technology-based account management, providing a fast payout on claims.
- Transparent policy handling:
- Lemonade shows how much customers would pay for extras and charges only a flat fee for their services.
- Difficulty accessing live customer support:
- While they do offer a phone number and email for customer support, getting a hold of live customer service may be harder with Lemonade than it is with other companies.
- Scarce ratings available:
- Many third-party rating companies do not rank Lemonade, likely due to the carrier being so new.
Lemonade Homeowners Insurance Highlights
Lemonade claims its homeowners insurance policies start as low as $25 per month, but these advertised prices don’t include any specifics regarding coverage levels or add-ons. The company promises lower rates compared to other insurance companies because it’s structured differently. Instead of making a profit by minimizing claims losses, Lemonade takes a flat fee for handling the administrative side of managing policies. It returns the money not used to pay claims to policyholders in the form of donations to philanthropic causes.
The factors that usually affect the cost of homeowners policies still apply, like age, location, size, and construction quality of your property. Recent claims history or poor credit (depending on your state) could also affect your policy cost or make you ineligible for coverage.
In addition to the traditional coverage for structure damage, liability, and personal property damages, Lemonade home insurance policies also cover theft of personal property anywhere in the world. For example, if your luggage is stolen in an airport miles away from home, your homeowners policy could cover the cost to replace your items.
We wrote an article about how Lemonade insurance works where you can learn about the company’s unique approach to insurance.
Lemonade has a 0.99 complaint index rating from the National Association of Insurance Commissioners (NAIC) for its homeowners insurance product. A 1.00 rating is average, so the NAIC received just under the average number of complaints regarding Lemonade’s homeowners insurance.
Lemonade boasts its creative use of technology and artificial intelligence as a tool to maximize efficiency, but customers who value a more traditional experience may not feel comfortable with the tech-focused style of Lemonade. However, if you’re looking for an efficient signup process, Lemonade’s online quote process and simple mobile app make signup and account management easy to do on your own.
Due to its unique organizational structure, Lemonade doesn’t offer promotional discounts or special deals. Instead, the company offers regular low prices and no-hassle claims service.
You may be able to purchase optional coverages to customize your home insurance policy, but these endorsements will vary by state.
As for discounts, Lemonade is soon stepping into the auto insurance market and could offer a multi-policy home/auto bundle discount.
We evaluated the company based on their customer rating and experience, financial stability, and coverage to determine Reviews.com score and create our Lemonade Homeowners Insurance Review. To compare this company with home insurance companies across the board, we then compared each Reviews.com score based on the following:
- Customer Ratings — Customer ratings are an indication of satisfaction with the process of filing a claim. We measured this using J.D. Power Homeowners Satisfaction ratings.
- Coverage — As there isn’t one company to fit everyone’s needs, we evaluated companies by the amount of coverage options and add-ons available.
- Confidence — It is extremely important for insurance companies to fulfill customers’ claims. Companies with sound financial strength will not have issues paying out claims, regardless of the amount. However, companies with weak financial strength might not be able to pay out claims. We measured this using AM Best’s ratings, which specializes in assessing the financial strength of insurance companies.
- Customer Experience — The number of complaints a company receives is an indicator of the overall customer experience as it expresses dissatisfaction. We have based this measure on the NAIC National Complaint Index.
|Company||Reviews.com Score||AM Best Financial Strength Rating||J.D. Power 2020 Score||NAIC Customer Complaints|
|Lemonade||**||N/A||N/A||Fewer complaints than average|
|Progressive||3.75||A+||797/1,000||More complaints than average|
|State Farm||3.75||A++||829/1,000||Fewer complaints than average|
|Allstate||4||A+||829/1000||More complaints than average|
|Geico||2.75||A++||N/A||Fewer complaints than average|
*All information accurate as of 08/25/2021.
**New providers may not have enough third party information to calculate a score.
Lemonade vs. State Farm
While Lemonade stands out for fast claim payments, State Farm may offer customers peace of mind, considering it is the largest home insurance company in the U.S.
Both Lemonade and State Farm have fewer complaints than average, based on the NAIC complaint index scores for the home insurance products.
However, there’s also a big gap in availability, as Lemonade homeowners insurance only serves 23 states and Washington, D.C., while State Farm offers their policies in far more areas of the country. Still, where it’s available, Lemonade’s premium could be more affordable than State Farm’s, on average, and the transparent pricing structure might be appealing to some customers.
Lemonade vs. Geico
To compare Lemonade with Geico, we evaluated discounts, customer complaints, and the digital experience that both companies offer. Both companies lack a wide variety of discounts and deals for their customers, but have lower-than-average complaint index scores.
Even if Lemonade focuses on a more high-tech technology experience for its users, Geico also does a great job of having an impressive digital platform. However, Geico has more convenient live-agent access than Lemonade.
Another noteworthy difference is that Geico’s main business is auto insurance, and partners with other providers to offer home and business policies. On the other hand, Lemonade only has homeowners, renters and pet insurance, which limits your opportunities to bundle policies for savings or convenience. Lemonade will soon begin to offer auto insurance, though.
The Bottom Line
Lemonade promises transparency and honesty in dealing with customer issues and claims, but the company’s lack of ratings leave some unanswered questions regarding its long-term viability as a reputable insurer. If you prefer a more traditional insurance experience, Lemonade may not be a good fit for your homeowners policy.
Younger homeowners especially might appreciate the self-service features and fast claims processing provided with this policy. Overall, for customers who value plain-language policies and self-management features, the straightforward home insurance coverage of Lemonade homeowners insurance could be a great fit.
Lemonade Home Insurance FAQ
Lemonade primarily offers renters and homeowners insurance, with condo and co-op coverage offered in select areas. Lemonade also offers pet insurance and life insurance in some areas, and is advertising that it will soon begin to offer car insurance.
To make sure you’re properly covered, you should estimate replacement costs for your home, any accessory structures or outbuildings on your property, and all personal property including valuables.
For valuable items especially, having an estimated value and receipts (if possible) can be important for determining replacement cost.The replacement value of some items, such as jewelry or antiques, may be limited under a traditional policy and may require additional coverage to be fully insured.
Lemonade homeowners insurance policies are currently available in 23 states: Arizona, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. Homeowners can also get coverage in Washington, D.C., and the company continues to expand across the U.S.
Lemonade home insurance uses a process called precision underwriting to underwrite its policies and process claims. This process uses artificial intelligence to gather much more data on Lemonade’s customers and evaluate that data across 10 times as many data points as traditional insurance companies. Because this is all handled and processed using artificial intelligence, Lemonade can process applications and issue policies quickly.
Lemonade homeowners insurance protects properties for standard damage due to storms or other perils, such as fire or break-ins. Any personal property damaged during a covered event is also protected, and personal property is covered against theft anywhere in the world. Several other costs, such as medical expenses due to an accident that occurs on your property and extra living expenses, if you’re displaced, are also covered.