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Lemonade Homeowners Insurance Review 2021

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Lemonade offers AI-driven products and services, providing cheap, basic insurance. They advertise that claims can be processed in at little as three seconds, as well. However, there is no live support, so if you want to talk to a human, look elsewhere. Also, Lemonade isn’t offered in all states. Read on to find out if Lemonade is an insurer you can trust with your house while sticking to a budget.

With cheap, flexible policies, out-of-the-box thinking and innovative technology, Lemonade homeowners insurance is for those seeking affordable, hassle-free coverage during these uncertain times.

  • Cheap monthly plans
  • Fast transparent service
  • Easy claims resolution
  • Limited to certain states
  • No live customer support

Our methodology

For this Lemonade home insurance review, we compared the company’s coverage, discounts, support, accessibility, customer satisfaction and support using the SimpleScore methodology.

We compared Lemonade with its competitors by analyzing our SimpleScore along with third-party reviewers, such as J.D. Power and Consumer Reports.

How does Lemonade home insurance work?

  • Lemonade offers low-cost homeowners insurance made easy online.
  • Limited to a few select states, though high ratings in those states.
  • Automatic claims processing on up to 30% of its claims.
  • Lemonade gives back to charity when certain financial requirements are met.
  • Lemonade Insurance reviews are mostly positive.

America’s top-rated home insurance

  • Policies starting at just $25/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

Lemonade homeowners insurance overview

What we like about Lemonade

As the newest kid on the homeowners insurance block, Lemonade has captured the attention of the world with its peer-to-peer model, the only one of its kind in the U.S. at present. In a P2P system, customers are assembled into ‘peer groups’, and all the premium money accumulated into a collective pool. When a claim is made, money from this pool is used to pay for it. Lemonade homeowners insurance gives us a lot to like.

Cheapest monthly plans 

While premiums are largely dependent on the type of coverage chosen and the amount of property insured, Lemonade offers the lowest monthly rates starting at only $5 for up to $10,000 worth of personal possessions.

Fast, transparent service

Lemonade uses AI-powered bots to handle most of its customer service. By using the website or mobile app, you can sign up for a policy in a matter of minutes and get instant coverage. The company also strives to live up to its claims and is honest about the shortcomings.

Easy claims resolution

Filing insurance claims and having them approved can typically be quite a hassle with traditional providers. Lemonade simplifies the process by instantly approving 30% of claims and paying them within a few minutes. If a claim cannot be approved by the AI bots, it is handled by a professional team.

Who is it for?

Those who need basic, cheap coverage for their property and personal possessions and service that is quick and efficient

[Read: How to Pick Your First Homeowners Insurance Policy]

Things to consider

Although a game-changer in the home insurance market, Lemonade may not be for everyone. Before you decide if this is the right insurance provider for you, consider the following downsides.

Limited to certain states

Most traditional insurance providers are available all over the country, but Lemonade is currently accessible to only certain states. Although there are plans to be available nationwide, at present, you cannot sign up if you do not reside in one of the qualifying states.

Limited live customer support 

Customer reviews about Lemonade homeowners insurance mention the difficulty of connecting to a live person if you have queries or concerns that are not resolved by the automated bots.

Who it isn’t for

Those who reside in a state not covered by Lemonade or who prefer to talk to real people over chatbots.

How we analyzed 

Discounts

The home insurance discounts offered by Lemonade are nothing out of the ordinary. Most of these are available with major home insurance providers. Some of the Lemonade discounts are:

  • Material discount: For those who live in a house built with fire-resistant materials.
  • Fire protection discount: For those who have fire safety equipment like a fire extinguisher or sprinkler system in their house.
  • Protection equipment discount: For those who have fire and burglar alarms installed in their house.
  • Gated community: For those who live in a condo or a gated community.

Coverage

Lemonade home insurance coverage leaves a lot to desire. The options of dwelling coverage, liability and loss of use, and personal property coverages are typically offered by most home insurance providers, but Lemonade tries to make a mark with a few unique options.

  • Earthquake coverage: If you are in California or Arkansas, this offering covers your house against damage from earthquakes.
  • Water backup: For damages resulting from a sewer drain backing up into your house.
  • Extended reconstruction cost: If your building costs exceed the original amount due to unforeseen circumstances, this option pays for the extra cost.
  • Valuables coverage: With this option, you can add your valuable possessions such as jewelry or musical instruments worth no more than $10,000 to your existing policy at an extra price.

Customer Satisfaction

The Lemonade app is highly-rated by customers, thanks to the simplified process and ease of use. In October 2020, Lemonade renters insurance ranked the highest in the J.D. Power 2020 U.S. Home Insurance Study. This was the first instance of an Insurtech company snatched the highest spot in a J.D. Power survey. The study was based on five key factors: price, process, interaction, policy offerings and claims. Despite a few complaints about difficulty reaching a live agent, Lemonade has fewer complaints than its competitors, according to the National Association of Insurance Commissioners (NAIC).

Support

The website and mobile app make using Lemonade home insurance a breeze, but there is no in-person support or brick-and-mortar office. Customer support is handled by chatbots, and although there is a phone number for filing claims, reaching a real person is often hard with Lemonade.

Accessibility

The easy accessibility of the website and mobile app compensate for the absence of live customer support. From getting quotes to signing up for policies to filing claims, the intelligent bots are capable of handling it all. For the younger, tech-savvy generations, the automated, straightforward process is what makes Lemonade stand out from the crowd.

America’s top-rated home insurance

  • Policies starting at just $25/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

Lemonade home insurance vs. the competition

There is no dearth of homeowners insurance providers on the market today, and many of them have nationwide coverage and bundle options- two of the factors that affect Lemonade’s suitability. If you need home or renters insurance from a different company, the following are some of Lemonade’s major competitors based on availability, coverage options, and discounts.

Allstate ranks 4 out of 5 over at Consumer Reports for claims amount, agent courtesy, timely payment and promptness of response.

If you are looking for discounted insurance premiums, Allstate beats every other competitor. You get a welcome discount when you sign up, and additional discounts for theft and fire protection systems installed in your house as well as for other safety features like fire-resistant materials or storm protection. Besides, Allstate has several optional coverage plans for everything from landscaping to commercial property.

Nationwide ranks a 4 out of 5 in customer satisfaction with J.D. Power, while it gets a 5 out of 5 in support and accessibility with our SimpleScore.

SimpleScore

4.4 / 5.0

SimpleScore Nationwide 4.4

For those who want to bundle their insurance policies for convenience and lower rates, Nationwide is a wise choice. A major, full-service provider, Nationwide lets you combine your homeowners insurance with auto, pet or personal insurance policies. If you require additional options, such as flood and earthquake insurance, replacement cost coverage, or even identity theft insurance, Nationwide has you covered.

One of the largest providers of home insurance in the U.S., State Farm offers excellent, personal service.

When customer satisfaction is of chief importance to you, look no further than State Farm — one of the biggest players in the insurance market. However, the company does not have information on coverage options readily available online and you need to get in touch with the team for a quote.

[Read: A Home Insurance Guide For Multigenerational Families During Covid-19]

Lemonade’s rates

Although Lemonade has rates as low as $5 a month (for renters insurance), what you pay in premiums will depend largely on the kind of property you are insuring, where you live and the coverage options you choose. However, for the most basic coverage, Lemonade does offer the lowest rates. For instance, for a $250,000 dwelling coverage limit, Lemonade costs $120 a month compared to the competitor average of $186 per month

Unlike many of its competitors, Lemonade charges a flat fee of 25%, and as a certified B-corp, the company donates unclaimed money to charities. Customers get to choose a charity of their choice during the signup process.

Lemonade website and mobile app

The innovative technology used by Lemonade is its distinguishing feature, drawing the world’s attention and sparing customers the hassle usually involved in signing up for an insurance policy. Even though the company has no live sales agents, the highly developed AI chatbots more than make up for it. The software running these bots is designed and authorized to work without human intervention, handling everything from registering new customers, to providing quotes, to paying claims.

The Lemonade website and app are highly rated because of the intelligent technology and ease of use. As a leading Insurtech company, Lemonade appeals to the newer generation with tools to save time and maximize efficiency.

Lemonade renters and pet health insurance

Renters insurance- Lemonade offers the lowest rates for renters insurance, and although the coverage options are fairly basic, the company stands out with its Zero Everything feature. This option (available only in some states) allows you to choose a zero dollar deductible for a higher rate. Your rate will not increase as long as you do not make more than two claims a year. There is also an option for extra coverage for valuables like jewelry, art and bicycles.

Pet health- Lemonade’s pet insurance is a recent offering. It is a basic, industry-standard Accident & Illness policy with the option to add wellness coverage (for routine exams, tests, and vaccines). Plans start at $12 per month.

Bundling options- At present, Lemonade has a bundling option for home or renters insurance with its pet policy. Homeowners and renters with pets can save up to 10% in premiums when they combine the two policies.

Lemonade in the news

  • In August 2020, Insurance Journal ran an article highlighting Lemonade’s first public earnings report where the company disclosed the losses suffered in the year’s second quarter and claimed to have made progress.
  • In 2019, Forbes reported on the best and cheapest places to find renters insurance. Lemonade was hailed as the leading fintech insurer in his segment. That same year, Forbes also published a story about how Lemonade is disrupting the insurance industry.
  • In 2018, the Harvard Business School Digital Initiative published a report on Lemonade’s use of machine learning to transform the insurance industry. “Viewing Lemonade as a revolution to the insurance industry, investors like SoftBank and Google Ventures backed the company with a $120 million funding,” the student report detailed.

We welcome your feedback on this article and would love to hear about your experience with the home insurance companies we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.