Lemonade is an online insurance company based in New York City. It provides low-cost renters, condo/co-op, and homeowners insurance. Lemonade is reinsured by various syndicates of Lloyd's of London. Lemonade is only available in New York, California, and Illinois.
Lemonade works on a mutual insurance model that is powered by AI and behavioral economics. The modern insurance model is based on an adversarial relationship where the interests of insurance company and clients are opposed. The less an insurance company pays out in claims, the better off the shareholders will be. This creates an incentive to deny claims. In Lemonade’s model (aka mutual insurance), the insurance company (i.e. Lemonade) charges a flat fee (20% of the premium) per customer. The rest of the money is used to pay clients’ claims and buy reinsurance from large insurance companies, such as Lloyd’s of London. Any money left over is distributed to charities selected by the clients.
What Are Lemonade Renters Insurance’s Ratings?
Lemonade has received a Financial Stability Rating of A- Exceptional and they are reinsured by some of the industry's biggest names, such as Lloyd's of London.
What Coverage Does Lemonade Renters Insurance Offer?
Lemonade offers renters, co-op, and homeowners insurance. Your policy covers everyone in your home who is related to you, which doesn’t include roommates.
Renters and homeowners insurance policies cover your belongings even if they are stolen outside of your home. Lemonade offers replacement value on your things. That means you will receive the cash amount you would need to buy again the item you lost – or a similar one if no longer available. Check your policy for limits on the amount you can claim for your stuff and covered events. You can increase your coverage on expensive items, such as jewelry or works of art.
How Does Lemonade Compare with Other Renters Insurance Companies?
Lemonade’s rates are low when compared to most homeowners and renters’ insurance. A typical renters insurance policy costs $5 a month.
- Low cost
- Easy to set up
- Donates unused money to charity
- Reduces conflict of interest between insurance company and client
- Insurance company charges a flat fee (20%)
We don’t like
- Not available in all states
- You don’t get to deduct the donation to charity