Lemonade is an online insurance company based in New York City. It provides low-cost renters and homeowners insurance. Lemonade is reinsured by insurance heavyweights like Lloyd’s of London and Berkshire Hathaway’s National Indemnity. Currently, Lemonade is only available in New York.

Lemonade works on a mutual insurance model it likes to market as peer-to-peer insurance. 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 peer-to-peer 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 not yet received ratings by Moody’s, AM Best, or Standard & Poor’s. However, it is reinsured by Lloyd’s and Berkshire Hathaway’s National Indemnity. Since it was launched, Lemonade has received $60 million in equity funding.

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.

We like:

- 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 for managing the insurance P2P platform (20%)

We don’t like

- Only available in New York

- You don’t get to deduct the donation to charity

  • Available 24/7 by Phone
  • Property Damage
  • Guest Medical Protection
  • Liability
  • Personal Property Protection
  • Reimbursed Living Expenses
  • Identity Theft Insurance
  • AM Best Financial Strength Rating
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0 votes

Seriously the best app and the best insurance available today!!

0 votes

This is exactly what I was waiting for. Insurance that I can understand. Finally this industry is catching up with 2017...

0 votes

Lemonade dresses itself up as the saint of insurance, but it's actually worse than just a plain old mutual. A mutual is an insurance company that pays a dividend if there are excess profits so a policyholder can profit share. However, Lemonade, instead of paying you a dividend, donates the excess profits to charity on your behalf.

This way Lemonade gets to keep the charitable tax deductions, so it profits even more than a typical mutual would. You get nothing.

The user experience was great and the ... price was cheap. However, this was definitely a teaser rate as their prices are comprised of 60% expenses, which is actually worse than the industry. More Less

0 votes

Looks like an easy way to get renters insurance in New York. $5 a month is hard to beat. I like the flat-fee model.

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