Lemonade Auto Insurance Review (2021)

If you’re looking for a Lemonade auto insurance review, you should know this company does not sell auto insurance policies. Lemonade sells homeowners, renters, and pet insurance across 24 states. Using a peer-to-peer insurance policy, 20 percent of your premiums pay for company costs. The remaining 80 percent goes towards paying client claims. Any remaining balance at the end of June goes to a charity chosen by Lemonade customers. Lemonade claims to charge up to 80 percent less than its competitors. Scroll down to learn if Lemonade is right for you.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 15, 2021

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Company Details
Address: 5 Crosby St. 3rd floor
City: New York
State: NY
ZIP Code: 10013
Phone Number: 844-733-8666
Year Founded: 2016
AM Best Rating: N/A
Company Rating 0 (0 reviews)

Things to Remember

  • Lemonade doesn’t write auto insurance. If you’re looking for auto coverage, you’ll have to look elsewhere. 
  • Lemonade is an online-only insurance company writing homeowner, renters, and pet insurance policies.
  • Lemonade claims to charge 80 percent less for insurance than its competitors. 

When you hear the word “lemonade,” you may not think of insurance. Lemonade, however, is the name of an up-and-coming insurance company. If you’re hoping for a Lemonade auto insurance review, you should know that this provider does not offer auto insurance.

With such an original name, you might ask yourself: is Lemonade a legit insurance company? For the past few years, Lemonade has been making a name for itself in the industry. 

What coverage options are available through Lemonade? While Lemonade cannot offer you a cheap auto insurance policy, the company is known for its homeowners, renters, and pet insurance.

First, we’ll go over Lemonade’s history, current structure, and how Lemonade insurance claims works. Then, we’ll share the best way to get a quote for the policies they do offer.

You can’t buy a Lemonade auto insurance policy, but if you’re ready to get an auto insurance quote right now, you can enter your five-digit ZIP code into our FREE quote tool above.

Does the Lemonade Insurance Company sell auto insurance?

If you own a car, you may be wondering about the different types of auto insurance coverage options offered through Lemonade. Unfortunately, Lemonade does not sell auto insurance of any kind. However, the Lemonade Insurance Company does offer property coverage.

Lemonade’s property insurance covers a number of perils, including electrical and water damage. You can also get Lemonade fire insurance and they insure personal property damage. That means you can even get Lemonade bike insurance.

In the table below, take a look at the starting monthly rates for homeowners insurance, renters insurance, and pet insurance offered through Lemonade. 

Lemonade Monthly Starting Prices by Policy Type
Lemonade Insurance Policy TypeStarting Monthly Rates
Homeowners Insurance$5
Renters Insurance$25
Pet Insurance$10
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The company also claims you’ll save money by switching to its services. In the table below, check out how much users on average have saved from going from a major national company to Lemonade. 

Lemonade Average Annual Percent Saved by Switching Providers by Company
CompaniesPercent of Average Savings by Switching to Lemonade
Progressive31%
Allstate19%
Liberty Mutual10%
State Farm16%
Travelers14%
GEICO10%
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Now that you’ve seen its prices, you’re probably wondering why Lemonade’s insurance is so cheap. One of Lemonade’s biggest benefits is that it is significantly cheaper than its competitors. This is because it is a peer-to-peer insurance company. 

Lemonade charges less than average by cutting internal costs as much as possible.

According to the company website, you’ll be placed into a group with other customers. A base rate of 20  percent of your premiums will go directly towards paying for the salaries, running, and technology costs for the company. 

The other 80 percent of your premiums will go towards paying for customer claims. If there is any money left at the end of June, all remaining funds are donated to the charity chosen by your group. 

The Lemonade Insurance Company claims to charge 80 percent less than other insurers.

Because automobile accidents are so common, auto insurers have to pay out a lot of claims to their customers. This means that auto insurance has a lower profitability rate than other types of insurance. 

What an auto insurance specialist says about bundling rates is that for insurance companies to offer both home and auto insurance, it must raise home insurance premiums to offset any losses.

By not offering auto insurance, Lemonade is able to offer home insurance premiums that are lower than average.

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Does Lemonade have agents?

Lemonade does not have traditional agents. As a result, it has fewer employees than many other insurance companies of comparable size. This is another factor that helps keep Lemonade’s premiums low.

Like many other tech start-up users, Lemonade’s customers use artificial intelligence on the company’s mobile app and website in lieu of consulting with an agent.

Policyholders run claims through a chatbot named “A.I. Jim.” The chatbot is designed to review claims while simultaneously running fraud algorithms.

Unlike another major online insurance company, GEICO, Lemonade doesn’t use agents in any capacity.

What Is The Peer-to-Peer Insurance Process?

Unlike a lot of companies that rely on the traditional model, Lemonade uses the peer-to-peer model but goes above and beyond. The peer-to-peer model removes the middleman, which can lead to borrowers getting access to cheaper loans. 

Lemonade underwrites the policies themselves in addition to determining the pricing. Its customers will pay the base premium. An algorithm is used to then determine a client’s monthly fee.

Regarding the fee, Lemonade will take out a flat rate from your monthly premium to pay for client claims. According to the company website, the amount that is leftover in June will be donated to charities chosen by clients. This is one of the strategies employed to discourage fraudulent claims and increase retention. 

Lemonade also works with a second company that helps it pay for any potential losses. Called reinsurance, Lemonade shares an amount of the premium with the other company and overall, this process helps to avoid any unnecessary issues that could arise over the premium. 

Because of the length of the reinsurance, both Lemonade and its clients don’t have the same problem as other companies who fight with customers over money and claims every year. The system is built without the bureaucratic nightmares and pitfalls that other companies experience.

How do I file a claim with Lemonade?

The company is well known for making its claims process simple and pain-free.

The company’s objective is to compensate policyholders as quickly as possible. In 2016, Lemonade set a world record by reviewing, approving, and paying a claim in three seconds.

Here’s the easiest way to file a claim:

  1. Open the mobile app and click the “Claim” button.
  2. Complete a claim report. The claim report will ask you basic questions about the incident and prompt you to include relevant receipts. You may also be asked to submit a video explaining your incident and record any visible damages.
  3. After you complete your report, you will be prompted to submit your bank account information. This will allow the company to send you compensation once your claim has been approved.

The claim process through this company is very unique. See below for more details.

Every part of filing your claim will be done entirely online or through the mobile app. That’s all there is to it.

This claims filing process is touted as being both streamlined and easily accessible to consumers.

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Where is Lemonade insurance available?

The company was founded in New York City but has since expanded across the United States.

Today, renters, condo, and homeowners insurance policies are available in 24 states. These states include:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Georgia
  • Illinois
  • Indiana
  • Iowa
  • Maryland
  • Massachusetts
  • Michigan
  • Missouri
  • Nevada
  • New Jersey
  • New York
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Tennessee
  • Texas
  • Virginia
  • Washington D.C.
  • Wisconsin.

This provider also offers renters and condo insurance in Rhode Island and renters insurance in Arkansas and New Mexico.

Its landlord insurance is available in New York, California, Texas, Illinois, Pennsylvania, Washington D.C., and New Jersey. However, policies have only recently been made available in these states.

In late 2019, Lemonade insurance programs were brought to Massachusetts and Missouri. The company has stated that it plans to roll out insurance coverage in additional states in the future.

Lemonade does not offer walk-in agencies or locations. Instead, all of Lemonade’s features are accessed through the company’s mobile app and website. 

That includes proof of insurance, which will be sent to your mortgage company directly.

What Are The Benefits of Lemonade?

For many folks looking for home, renter, and pet insurance, it offers a lot of appealing benefits.

While the low price is a major plus, the company also provides clients with different add-ons and extras. Keep reading to learn more. 

Extra Coverage and Add-Ons

Lemonade allows you to add extra coverage at any time. The current list consists of musical instruments, bicycles, jewelry, and more. 

You will not need to purchase extra coverage for basic things, like garments and clothing. 

Lemonade gives ample instructions on its website about what to do to add extra coverage and will provide you with your new premium that will need to be paid. 

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Storage Options

Any personal items that clients of Lemonade maintain in a self-storage unit, separate from where they live, are covered up to $1,000. In fact, the company claims to cover your property anywhere in the world. 

For some states, the policy covers possessions in a self-storage locker for up to a certain percentage and personal property limit. 

Family Coverage

While a roommate is not covered through renters insurance, Lemonade’s policy does cover residents living within the client’s household. Significant others are also covered. 

If you do not live with your significant other, the other individuals must be related to you, either adopted or by blood, in order to be protected by the Lemonade homeowners policy. 

On its website, Lemonade does claim that adding a significant other to your policy will come at an extra cost.

What Are The 16 Perils Protected?

A named-peril is a negative thing that could impact or destroy your personal property. Currently, Lemonade protects you from 16 perils.

Some examples of perils covered through Lemonade include lightning, fire, rioting, freezing, theft, and more. 

If your bike was locked up but gets stolen, you could make a claim through your Lemonade policy. The same thing applies if the tenant above you leaves the water on and floods your apartment. 

To help you get your life back in order, Lemonade’s coverage will also help pay for the replacement value of the affected property. 

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What Is The Company History and Ratings?

Lemonade was launched in 2016 by tech entrepreneurs Daniel Schreiber and Shai Wininger. Schreiber and Wininger, who previously led Powermat Industries and Fiverr, wanted to create a tech insurance company based on behavioral economics, transparency, and promoting social good. 

Using seed funding from Sequoia Capital and Aleph, the two partners set up Lemonade’s innovative business model.

Unlike traditional insurers, Lemonade relies heavily on artificial intelligence and web interfaces. Customers sign up for policies digitally and file claims using chatbots and mobile apps. This has made Lemonade very popular among younger insurance holders. 

According to Forbes, in 2018, 75 percent of Lemonade’s customers were under 30 years old and 90 percent were purchasing homeowners or renters insurance for the first time.

Artificial insurance is also responsible for underwriting Lemonade’s insurance policies. This helps Lemonade collect about 100 times more data points per customer than traditional insurers.

Lemonade keeps 20 percent of the revenue it makes from insurance premiums. The remaining 80 percent is used to pay Lemonade insurance claims, purchase reinsurance, and fund Lemonade’s Giveback program.

Lemonade’s Giveback program is its most unique feature. Every year, any company revenue that hasn’t been used to pay claims and purchase reinsurance is donated to causes that Lemonade’s policyholders care about.

Here’s a look at Lemonade’s market share in the home insurance industry compared to the top five home insurance companies as listed by the Insurance Information Institute.

Lemonade's Market Share Compared to the Top Five Biggest Home Insurance Companies
CompaniesMarket Share (Home Insurance)
State Farm18%
Allstate8.4%
USAA6.6%
Liberty Mutual6.5%
Farmers Insurance5.7%
Lemonade0.1%
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The company has been rated “A – Exceptional” by Demotech, Inc. and was one of the Wall Street Journal’s top 25 companies to watch in 2017. 

Lemonade reviews with the Better Business Bureau (BBB) are positive, with nearly 5 stars overall. The BBB gives them an A- rating.

Who can benefit from Lemonade?

As stated on the website, Lemonade happily benefits “home and renters insurance for urban dwellers.” This is the group that prefers to rent. 

Lemonade seems to have an effective strategy as, looking at their demographics, over 77 percent of their customers are in the 25 to 45 age range. Only 2 percent are in the 65 and above age bracket. 

The company’s unique strategy has opened the doors to a plethora of clientele, from singers and artists to entrepreneurs. Additionally, you can find high-profile brands that have benefitted from them, like Facebook, Google, Apple, HBO, and more.

This may not be the ideal decision for everyone. Potential risks, like natural disasters, for example, may make the rates temporarily more expensive. This is because more customers are likely to file more claims, increasing the peer-to-peer premiums.  

A founder of one company noted that, while the process of getting a quote was quick and smooth, the rate that they would be paying was significantly higher than what they were currently paying with a different provider. 

Currently, coverage is not offered everywhere. Remember, renters, condo, and homeowners insurance are offered to only 24 states. Some states, like Arkansas, only have access to the company’s renters insurance policies available.

See the company website for specific information about where all of the insurance services are available.

Regardless, to find the ideal company for your needs, you should always compare quotes from a variety of providers. Lemonade may present the coverage right for you, but you’ll only know the rates are right through comparison shopping.

What Is The Giveback Program?

This business has done something special by creating its own charity program. Dubbed the Lemonade’s Giveback Program, this provider donates the remainder of a client’s premium to a charity of their choosing if any fund remains by the month of June.

To further elaborate, Lemonade disperses a flat rate percentage among various items, like salaries, reinsurance coverage, and the claims themselves. Any remaining money is then donated to the selected nonprofit or charity.

On a yearly basis, the charity receives up to 40 percent of unclaimed money. In 2017, the Giveback program saw $53,174 in total. It has multiplied exponentially each year since, and in 2020, crossed the million-dollar mark at $1,128,109. 

The donations have gone to a wide range of charities, which include the American Red Cross, Teach For America, The Trevor Project, and more.

In 2020, 50,000 ICU patients affected by COVID-19 saw the benefits from Lemonade and its clientele when they were treated by critical care specialists thanks to a direct relief program.  

More than 7,800 meals, masks, and personal protective equipment were given to frontline workers and older individuals. Over 103 families had their rent taken care of for three months. Additionally, New York City mothers, who were without shelter and unemployed, had 3,000 jobs sourced to them through Lemonade’s charity work.

That’s not all. The environment has also been positively impacted with almost 37,000 trees planted as a result of Lemonade’s philanthropic programming. 

Also, 355,000 students across the U.S. received financial support, and almost 15,000 veterans got the wellness resources that were needed, all from the company and its clients.

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How do I get a quote from Lemonade?

If you’re interested in purchasing a policy, you can easily obtain a quote through the company’s website or mobile app. There is no number to call or agent to talk to.

Once you are on the company’s landing page, click on “Check Our Prices.” This will guide you to a chatbot, who then walks you through the process of obtaining a quote.

Can you call with insurance inquiries?

You can, but the number is reserved for claims that need to be filed when a customer does not have access to the mobile app or website. The number listed on the company website is 1-844-733-8666.

To cancel your policy, you can use the app or website.

You are now a Lemonade insurance expert. While the company does not sell any auto insurance, there are plenty of other home and renters options available that many clients find to be very appealing. 

Lemonade auto insurance might not exist, but if you’re interested in comparing auto insurance quotes from multiple companies at once, you can enter your five-digit ZIP code into our FREE quote box below.

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