Lemonade is a fairly new insurance company that uses artificial intelligence to streamline the insurance application and claims process. You’ll have the flexibility to craft your own policy coverage and set deductibles while paying lower than standard premiums. However, Lemonade does have some policy limitations that most insurance companies don’t have, and it isn’t available in all states.
Low premiums: You can get a basic renters insurance policy covering $10,000 of personal property starting as low as $5 per month.
Instantly customizable policies: You can choose the deductible on your policy, choose coverage options, add additional insureds, or add on extra insurance coverage for pricier items like musical instruments or fine art. With Lemonade’s Live Policy you can make instant changes to your policy directly from your phone.
Fast claims processing and payments: Filing a claim is as easy as going on the Lemonade app, answering a few questions, and sending in a video explaining how the loss occurred. In most cases, your claims could be paid in as little as three minutes.
Loss of use: Lemonade caps its loss of use benefit (which covers the cost of alternate accommodations if your home or apartment becomes unlivable) at a maximum of $2,500 per year with its basic policy, rather than for a specific time period. If you use up the benefits before you can return to your home, you’re out of luck. However, this benefit can be increased by adding coverage to your policy.
Not available in all states: As of this moment, Lemonade renters insurance is only available in 28 states (Arizona, Arkansas, California, Colorado, Connecticut, Washington D.C., Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington, and Wisconsin). Lemonade does plan to expand to other states in the near future.
Lemonade Renters Insurance Policy Details
Lemonade Renters Insurance Policy Details
With Lemonade’s basic policy you’ll get fairly standard coverage. Your property will be insured against damage from fire, burst pipes, theft, vandalism, and other named perils for a minimum of $10,000 per year as long as the items are normally kept in your home.
In terms of replacing lost or damaged items, Lemonade will pay the cost to repair or replace an item with one of the same brand and model if possible, or pay an amount that is enough to buy an equivalent if the exact item is no longer available.
Your policy will also provide a minimum of $100,000 in personal liability coverage for claims of physical damage or injury made by another person and will also provide legal representation.
If your apartment or house is damaged because of theft, fire, or vandalism, and becomes unlivable, Lemonade will provide you reimbursement to cover AirBnB or hotel accommodations and living expenses while your home is being repaired.
All of these coverage amounts are standard with Lemonade’s most economical policy. If you need more coverage, you can increase the total or per item amount of insurance at any time (before making a claim, of course). There is also a standard $500 deductible which you can also change at any time.
Before committing to taking out any insurance policy, be sure to evaluate how much coverage you actually need to protect your property. Keep in mind that the more coverage you add on to your policy, the higher the premiums.
Lemonade Insurance Add-On Packages
Lemonade also offers additional coverages or add-ons that can help you round out your renter’s insurance policy. These add-ons include, among others:
- Earthquake package – important if you live in an earthquake-prone area.
- Water back-up package – in case your sewer system decides to pay you a visit through your bathroom.
Other Types of Insurance offered:
- Homeowners Insurance
- Condo Insurance
- Co-op Insurance
- Pet Health Insurance
What Makes Lemonade Stand Out
There are a number of things that make Lemonade different from its competitors, from its low premiums to its ease of use. But what makes Lemonade really stand out is its Giveback program and unique business model.
When you buy a renters insurance (or any) policy from Lemonade, you’ll be asked to choose a non-profit organization from a pre-selected list. Lemonade takes a flat fee from your premium to cover its operational expenses and other costs, and the remainder will go into a pool with the premiums from other Lemonade customers who chose the same charity. If you file for a claim, it will be paid out of this pool.
Once a year, Lemonade will take any money that has not been paid out in claims and donate up to 40% of it to your selected charity. So you not only get great insurance benefits at a reasonable cost, but you also give back to your community.
Lemonade Insurance Company Information
Lemonade was founded in 2015 in New York City, where it is currently headquartered. It is a registered public benefit corporation, which allows “public benefit” to be a corporate charter purpose alongside the goal of maximizing profits.
In 2016, Lemonade became one of the few insurance providers to be certified as a B-Corporation, a third-party standard that requires companies to meet social sustainability and environmental performance, accountability, and transparency standards.
In 2020, Lemonade obtained an A-Exceptional financial stability rating from Demotech.
Factors That Determine Lemonade’s Insurance Premiums
Lemonade will calculate each policyholder’s premium on an individual basis, so you may not get the exact premium advertised on the website. But knowing which factors Lemonade uses to calculate pricing can give you an idea of how much you’ll pay.
How much coverage you want in your policy will be an important determining factor in how your premiums are set. The higher the value of your possessions, the higher your premium will be. Policy add-ons, like extra coverage for high-value items like jewelry or electronics, can also increase your premiums. Your deductible will influence your premium as well – a higher deductible usually leads to a lower premium.
Your credit history is one of the major factors taken into consideration, as it gives the insurance company an idea of your ability to pay the premium when it’s due. Your claim history will have an effect as well. Prior insurance claims, no matter how small, can lead to a higher premium.
The age and condition of the property you live in are major factors. Newly constructed homes or recently renovated properties will be less expensive to insure than older homes that may have electrical or plumbing issues. Larger properties will have higher premiums as well.
What area you live in can also influence your premium. High crime areas can lead to higher premiums, as there is a higher risk of property damage or loss. However, living in close proximity to emergency services like fire and police departments can lead to lower premiums, as will home safety devices like burglar and fire alarms.
You can always ask your insurance company what information went into determining the premium you’re offered, and whether there are actions you can take to reduce it or if there are discounts you can take advantage of.
Lemonade Renters Insurance FAQs
How can I get a Lemonade Insurance policy?
You can go online or download the app to apply for renters insurance quotes. You’ll need to answer questions about the property you’re insuring, the value of your possessions, and how much coverage you want. The whole process, from application to a decision on approval, takes a few minutes.
Will Lemonade cover my roommate’s property?
No. The insurance policy will only cover the policyholder and his/her property. Your roommate should have their own insurance policy.
Will Lemonade’s renter’s insurance cover my property if it is stolen outside of my home?
Yes, the Lemonade renters policy will payout for theft of your personal property anywhere in the world. You will need to file a police report, including information about the officer taking the report, the precinct, and the report number, and submit it along with your claim. Stolen pets are not covered.
How can I file claims with Lemonade?
Claims are filed through the mobile app. You’ll need to answer some questions about the property loss or damage, the value of the items, and about the circumstances surrounding the loss. Lemonade will also ask you to send them a short video explaining the loss and how it occurred.
How fast does Lemonade pay their claims?
The fastest that Lemonade has paid a claim is 3 seconds. Most claims will be paid in a matter of minutes after filing. However, some claims may require more information, documentation, or further investigation, which can delay payment.
Lemonade Renter’s Insurance: Summary and Key Takeaways
- Fast and easy application process online or through the app
- Low starting premiums compared to other insurers
- Fast claims processing and claim payment in most cases
- Easy to understand policies with clear descriptions of what’s covered and what’s not covered
- Easily customizable policies that can be changed instantly through the app
- Gives back a percentage of unpaid claim money to non-profit organizations chosen by policyholders