Lemonade Insurance Review: The World’s First Peer to Peer Insurance Company Does Insurance and Claims Payouts Better

GOBankingRates Score

4.7
Our Take: Lemonade is disrupting the way insurance is bought and sold by using sharing economy principles and artificial intelligence technology to bring you affordable insurance fast. Lemonade team members remind themselves that: "It's not our money." This means that the premiums you pay don't go into the pockets of Lemonade's chief executives and shareholders. Instead, the funds are in a shared pool of peers for when you need to file and receive payment for a claim.
  • Premiums
    4.8
  • Mobile App/Digital Experience
    4.8
  • Ease of Use
    4.5
  • Breadth of Products
    4.6
How did we calculate this?

Lemonade Insurance reviews from customers remark on how uniquely the carrier works. The top benefits and drawbacks include:

Pros

  • Easier claims process
  • Instant claims payments
  • Annual Giveback pays unused portions of your premiums to a cause of your choice

Cons

  • Not available in all states
  • No vehicle insurance offered

About Lemonade Insurance

Lemonade Insurance was founded in 2015 as the world’s first P2P insurance company. The company conquered the renter’s insurance market in just a few months with a 1% market share.

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It may not sound like much, but the top 10 carriers have at least 1.6% market share. Lemonade has managed to become a major player in just a few months. Home, renters, condo, pet and life insurance is available to residents of 23 to 27 states and Washington, D.C.

Lemonade Insurance Products

Lemonade Insurance is a relative newcomer to the insurance business. You’ll be able to purchase the following types of coverage:

Product Features
Homeowners
  • Starting at $25 per month
  • All digital
  • Instant coverage
Renters
  • Starting at $5 per month
  • Get coverage in 90 seconds or less
  • Instant claims payouts
Condo
  • Available in 25 states
Landlord
  • Available in CA, NY, TX, IL, PA, DC or NJ
  • For properties rented less than five times per year
Pet
  • Takes seconds to get coverage
  • Discounts for existing Lemonade customers
Life
  • Term life insurance
  • Starts at $9 per month
  • No medical exam needed

Lemonade Insurance works differently by grouping you into groups of similar peers. All your premiums are paid to your particular pool, speeding up the payout process when something goes wrong. Take a closer look at what types of insurance the carrier offers.

Sponsors of

Homeowners Insurance

Homeowners insurance is mandatory if you have a mortgage. Fortunately, Lemonade makes the process of getting home insurance fast and hassle-free.

Features

  • Includes dwelling and other structures, personal property, liability, loss of use and medical payments
  • HO-3 for homes and HO-6 for condominiums and co-ops available

Pros

  • Starts at $25 per month
  • Manage your insurance through the app or by calling for customer support from a human
  • Claims payouts in minutes

Cons

Renters Insurance

Renters insurance is the most successful product the carrier offers. It ranks first place in J.D. Power’s customer satisfaction study.

Features

  • Get coverage in as little as 90 seconds
  • Includes liability and property insurance

Pros

  • Your property is insured for covered events that happen in and out of your house.
  • Starts at $5 per day
  • Claims are typically paid in just a few minutes.

Cons

  • Limited options and endorsements

Life Insurance

Lemonade Insurance sells term life insurance. It’s the most affordable type of life insurance when you want to make sure your loved ones are cared for financially should you unexpectedly pass.

Sponsors of

Features

  • Terms of 10 to 20 years
  • Up to $1 million in coverage
  • Issued by North American Company for Life and Health Insurance, doing business for over 130 years

Pros

  • The underwriting and coverage process takes minutes instead of days
  • As little as $9 per month
  • No medical exams required
  • A full refund is issued if canceled within the first 30 days

Cons

  • Permanent life insurance not available
  • Only available for healthy individuals

Insurance Experience

Lemonade Insurance is a relative newcomer to the industry but has already earned a J.D. Power customer satisfaction award. Here’s more on what you can expect.

Customer Service

Although most of your insurance needs are handled by Maya, Lemonade’s AI bot, or through the mobile app, you can also get in touch with a human by email or by calling their customer service line.

Key Information

Accessibility and Branch Availability

Lemonade Insurance is a digital carrier. There are no offices available.

Mobile and Digital Experience

Lemonade’s digital experience is one of the strongest features. The mobile app earned the following ratings:

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  • Google Play: 4.5 out of 5 stars, 8.7K reviews
  • Apple Store: 4.9 out of 5 stars, 41.8K reviews

Where To Download the App:

Convenience and Ease of Use

The AI-powered website is incredibly simple to navigate and user-friendly. Maya, the AI bot will guide you when you have questions or you need an insurance quote.

How To Get Coverage

To get started, choose a product and let Maya help you along the process. The AI bot will ask you basic questions to determine the type of coverage you need and how much it will cost. According to Lemonade, you’ll be insured in just 90 seconds.

Lemonade Insurance vs. Competitors

It’s hard to compare traditional insurance companies with Lemonade’s peer-to-peer insurance system. Here are the biggest differences:

Competitor Best For
Lemonade Basic, quality, affordable coverage
State Farm Working with a local agent
GEICO Bundling home and auto insurance
USAA Military members looking for a full-service insurance company

Lemonade vs. State Farm

Both Lemonade and State Farm are reputable insurers providing quality products. Lemonade may be more affordable and the speed the claims are paid out can’t be beaten. State Farm beats Lemonade in physical presence, with thousands of agents and offices nationwide. In addition, State Farm offers more options so you can expand on basic coverage.

Sponsors of

Lemonade vs. GEICO

The main drawback to buying insurance with Lemonade is that it doesn’t offer vehicle insurance at this time. Bundling your car and home insurance can help you save significantly on both. GEICO is an affordable option when you’d like insurance for your home and auto in one place.

Lemonade vs. USAA

USAA and Lemonade both rank highly in J.D. Power’s insurance studies. Military personnel have special needs, such as the option to insure their vehicle overseas. If you are active duty or retired military personnel, a veteran, or related to someone who served, you could qualify for award-winning insurance from USAA.

Final Take

Lemonade Insurance provides affordable coverage and something that’s unheard of in the insurance industry — claims payouts in minutes. If you’re comfortable with a standard insurance product and willing to manage your policies digitally yourself, Lemonade may be the ideal choice for you.

Editor’s Favorite

We concur with the majority of renters who awarded Lemonade renter’s insurance with the top place in the J.D. Power Customer Satisfaction Study. The renter’s insurance policy can’t be beaten, with low premiums, simple to understand coverage and the ability to file a claim and get paid in just minutes.

Lemonade Insurance FAQ

Here are the answers to some commonly asked questions about Lemonade Insurance.
  • Is Lemonade a legit insurance company?
    • Lemonade insurance reviews confirm that the company is a legitimate source for insurance. The peer-to-peer insurance carrier is the highest-ranking provider for renter's insurance in the latest J.D. Power customer satisfaction study, which rates customer service, pricing and the claims process.
  • How does Lemonade make money?
    • Lemonade is disrupting the way people buy insurance by allocating the premiums you pay into a claims payout fund. This means that unlike traditional insurance, there are no unreasonable delays when it's time to payout your claims. So how does the company make money? Lemonade Insurance sets aside no more than 20% of the premiums you pay to cover its operating expenses such as employee salaries, marketing and overhead.
  • Why is Lemonade Insurance so cheap?
    • Lemonade creates peer groups of policyholders that allow them to pool their premiums together. When a user files a claim, the payout comes from the collective fund. If there's a shortage, Lemonade taps into reinsurance. Whatever amount is unused at the end of the year goes to your chosen charity as a "Giveback."

This content is not provided by Lemonade Insurance. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Lemonade Insurance.

About the Author

Cynthia Paez Bowman is a personal finance writer with degrees from American University in international business and journalism. Besides writing about personal finance, she writes about real estate, interior design and architecture. Her work has been featured in MSN, Brex, Freshome, MyMove, Emirates’ Open Skies magazine and more.

Lemonade Insurance Review: The World’s First Peer to Peer Insurance Company Does Insurance and Claims Payouts Better
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