Established in 2015, Lemonade Insurance Company is a recent entrant in the realm of home insurance. Much like other insurance infants today, Lemonade provides fundamental coverage, emphasizing user-friendliness and technological innovation. Lemonade’s home insurance is available in 22 states and the District of Columbia.
This insurer fosters a business model based on technology and behavioral economics, bringing in chatbots and artificial intelligence to interact with clients.
The Lemonade app’s hassle-free interface empowers clients to obtain a quote, modify their policy, and file a claim with utmost convenience. A remarkable 30% of claims have been processed by artificial intelligence.
With a zoomed-in focus on ease of use and comprehensive coverage, we wanted to see just how well Lemonade stood up to the competition. They claim to be a 5-star insurer with the most innovative technology and seamless features. Let’s put them to the test!
- District Of Columbia
- New Jersey
- New York
Lemonade home insurance coverages & annual premiums
Since Lemonade takes a technological approach to home insurance, everything can be done online. That means they don’t have much use for independent agents to sell their insurance for them.
As a result, they made sure to keep their website as informative and easy to navigate as possible. From here, homeowners can buy and modify their coverage seamlessly.
We put this technology to the test and got our own personalized quote from Lemonade. We chose a test location with a higher average cost for annual premiums. This home is located in Aurora, Colorado, and was built on 1,150 square feet of space in the 80s. It also has a few “other structures”, which we’ll get into in a minute.
After entering all the criteria, here’s what we got:
|Other Structures||$125,000 (50%)|
|Personal Property||$125,000 (50%)|
|Loss of Use||$75,000 (30%)|
These coverages are very familiar, with common limits perfect for protection from unforeseen circumstances.
Portable electronics is a creative coverage, though. This protection helps pay for the cost of your tablets, phones, laptops, and other portable electronics, effectively separating this category of items from your personal property.
Some optional coverages resembled this, like extended coverage options for our:
Other endorsements available to us were:
- Water backup: Covers the damage caused by water coming from your drain or sewer; starting at $9 a month.
- Swimming pool liability: This unique coverage is $33.92 extra a month, and takes care of any fees associated with your responsibility as a homeowner in the event that someone gets hurt in your swimming pool.
- Appliance breakdown: For $3 a month, you can enjoy extra coverage toward appliances and electronics that suffer a breakdown.
- Buried utilities: For $3.25 a month, you can have extra coverage for the underground pipes and cables under your home.
Lemonade homeowners insurance premiums
So, let’s recap. We were offered extensive coverage, plus a cool one we hadn’t seen before. Then, we were provided with a short list of unique endorsements with prices to match. How much would all this cost us?
The average home insurance rate in Colorado for between $200,000 and $350,000 in dwelling coverage is between $1,540 and $2,164. We were offered $250,000 in dwelling coverage for $2,037, which is on the higher side of the average rate we hoped for.
Nevertheless, this price is more than fair for the extra attention to coverage and the uncomplicated process. It would seem Lemonade provided us with more coverage for less money than a few of their top competitors anyway.
Checking the online reviews, we found many customers revel in getting a “sweet” deal by switching to Lemonade. Most reviews related to rates claim that Lemonade’s premiums are very competitive and affordable.
Lemonade home insurance discounts
Since Lemonade provided us with fair and inexpensive policies, we weren’t anticipating any insane discounts. Nevertheless, we came across a couple of savings opportunities designed to shrink our premiums.
- First of all, we were given a 5% discount for having protective devices in our home. During the quote process, we let the tool know that we had security and fire alarms on the property. This information prompted them to relinquish discounts in favor of being safety conscious.
- If we had a home built with fire-retardant materials, we would have been eligible for even more savings through their Material discount.
- The Gated Community discount is similar to the safety discount we received. If we lived in a gated community, Lemonade would consider us more prepared, which is grounds for discounts and savings.
- Lemonade carries pet insurance, which many other insurance companies shy away from. Bundling a pet insurance policy with your homeowners policy can help reduce your bill. The same goes for auto and life insurance policies.
Overall, we weren’t surprised that Lemonade didn’t give us a massive list of discounts. You can expect the same types of discounts you see with other insurers. For example, if you pay your premiums annually, Lemonade will reimburse you with some money back.
Albeit common, we’re happy to have been provided with more ways to save, other than toggling our deductibles and compromising our coverage.
Lemonade’s customer satisfaction reviews
Despite their claim of being an “almost” 5-star insurance company, Lemonade received just slightly more complaints in 2022, according to the NAIC. With the average level of complaints on the National Complaint Index automatically set at 1, Lemonade received 1.04 regarding homeowners insurance complaints.
Lemonade has yet to be accredited or rated by the BBB, but they do average 2.38 stars under their customer reviews. This may not seem like much, but it’s better than we’ve seen lately from their competitors.
Elsewhere on the internet, customers are overwhelmingly satisfied. Reputable customer review sites show an average of 4 stars, at least, followed by legitimately favorable testimonies from customers. Many customers explain that their chatbots and AI take some getting used to, but Lemonade personnel are mostly respectful, knowledgeable, and responsive.
Lemonade’s claims experience
Remember, everything done with this insurer is very tech-forward. That said, if you need to file a claim with Lemonade, you’ll have to log in to your account from your app and file a claim there.
From this app, an AI chatbot runs some algorithms before either assigning a team of people to work with you or instantly approving your claim right then and there. Their AI set the record for the fastest claim ever, having approved an issue with a man’s stolen coat in 3 seconds.
On the other hand, customers online tell about a long, but straightforward process. Even the NAIC explains that the majority of complaints against Lemonade’s home insurance are due to delays.
In the end, most of them still get paid their settlement, and many explain how hassle-free the process was. Others aren’t so happy about being denied their claims altogether. That may be an issue with not having agents to explain coverages to customers, so there are no surprises.
Lemonade’s financial strength
Being a junior in the industry of giants has its caveats. For instance, Lemonade’s financial strength has yet to be deemed strong enough to compete with other insurers. Lemonade is not rated by AM Best or the BBB.
Lemonade does, however, have an “Exceptional” A rating from Demotech as of January of this year. Weiss Ratings doesn’t share this same enthusiasm. They’ve rated Lemonade with a C- in insurance safety, meaning they believe Lemonade is among the lower 3rd of insurers that demonstrate fair financial security in a stable environment. It’s their impression that Lemonade could still suffer from economic insecurities, though – hence the below-average grade.
Lemonade is yet another youthful insurance company with dreams of renovating the insurance industry through technological innovation. Although it may be hard to tell from a financial standpoint, Lemonade has come through to turn insurance on its head.
With Lemonade, you can get extensive coverage at a fair price without the hassle of finding an agent. You can also file a claim and get your settlement in no time at all – if you’re lucky. You won’t find many discounts that will blow you away, but you could qualify for ways to save if you’re safety conscious enough.
Extremely satisfied customers can give any insurance company bragging rights. If Lemonade sounds like the right insurer for you, you could be among this fulfilled group of homeowners!