Lemonade is a relatively new player in the homeowner’s insurance market and is focused on technology-based account management. The company incorporates artificial intelligence into claims processes, potentially making it a popular choice for young adults. The company’s fast claims payments is one of its standout features.
Lemonade is upending the traditional insurance business model by taking a flat fee for its services and donating the surplus to various causes. While this technologically-forward company isn’t right for everyone, we encourage you to check our Lemonade homeowners insurance review to decide if it will fulfill your needs.
Lemonade Overview
Lemonade is part of a group of new digital insurance companies that leverage technology to improve processes and customer experience. Since Lemonade homeowners insurance has only been available for five years, many of the major rating companies have not yet published scores on the company. However, a smaller rating company that focuses specifically on insurance companies, Demotech, Inc., gives Lemonade an A (Exceptional) rating for financial stability.
PROS
- Fast claims processing:
- The company uses artificial intelligence and technology-based account management, providing a fast payout on claims.
- Transparent policy handling:
- Lemonade shows how much customers would pay for extras and charges only a flat fee for their services.
CONS
- Difficulty accessing live customer support:
- While they do offer a phone number and email for customer support, getting a hold of live customer service may be harder with Lemonade than it is with other companies.
- Scarce ratings available:
- Many third-party rating companies do not rank Lemonade, likely due to the carrier being so new.
Lemonade Homeowners Insurance Highlights
Methodology
We evaluated the company based on their customer rating and experience, financial stability, and coverage to determine Reviews.com score and create our Lemonade Homeowners Insurance Review. To compare this company with home insurance companies across the board, we then compared each Reviews.com score based on the following:
- Customer Ratings — Customer ratings are an indication of satisfaction with the process of filing a claim. We measured this using J.D. Power Homeowners Satisfaction ratings.
- Coverage — As there isn’t one company to fit everyone’s needs, we evaluated companies by the amount of coverage options and add-ons available.
- Confidence — It is extremely important for insurance companies to fulfill customers’ claims. Companies with sound financial strength will not have issues paying out claims, regardless of the amount. However, companies with weak financial strength might not be able to pay out claims. We measured this using AM Best’s ratings, which specializes in assessing the financial strength of insurance companies.
- Customer Experience — The number of complaints a company receives is an indicator of the overall customer experience as it expresses dissatisfaction. We have based this measure on the NAIC National Complaint Index.
The Competition
| Company | Reviews.com Score | AM Best Financial Strength Rating | J.D. Power 2020 Score | NAIC Customer Complaints |
| Lemonade | ** | N/A | N/A | Fewer complaints than average |
| Progressive | 3.75 | A+ | 797/1,000 | More complaints than average |
| State Farm | 3.75 | A++ | 829/1,000 | Fewer complaints than average |
| Allstate | 4 | A+ | 829/1000 | More complaints than average |
| Geico | 2.75 | A++ | N/A | Fewer complaints than average |
*All information accurate as of 08/25/2021.
**New providers may not have enough third party information to calculate a score.
Lemonade vs. State Farm
While Lemonade stands out for fast claim payments, State Farm may offer customers peace of mind, considering it is the largest home insurance company in the U.S.
Both Lemonade and State Farm have fewer complaints than average, based on the NAIC complaint index scores for the home insurance products.
However, there’s also a big gap in availability, as Lemonade homeowners insurance only serves 23 states and Washington, D.C., while State Farm offers their policies in far more areas of the country. Still, where it’s available, Lemonade’s premium could be more affordable than State Farm’s, on average, and the transparent pricing structure might be appealing to some customers.
Lemonade vs. Geico
To compare Lemonade with Geico, we evaluated discounts, customer complaints, and the digital experience that both companies offer. Both companies lack a wide variety of discounts and deals for their customers, but have lower-than-average complaint index scores.
Even if Lemonade focuses on a more high-tech technology experience for its users, Geico also does a great job of having an impressive digital platform. However, Geico has more convenient live-agent access than Lemonade.
Another noteworthy difference is that Geico’s main business is auto insurance, and partners with other providers to offer home and business policies. On the other hand, Lemonade only has homeowners, renters and pet insurance, which limits your opportunities to bundle policies for savings or convenience. Lemonade will soon begin to offer auto insurance, though.
The Bottom Line
Lemonade promises transparency and honesty in dealing with customer issues and claims, but the company’s lack of ratings leave some unanswered questions regarding its long-term viability as a reputable insurer. If you prefer a more traditional insurance experience, Lemonade may not be a good fit for your homeowners policy.
Younger homeowners especially might appreciate the self-service features and fast claims processing provided with this policy. Overall, for customers who value plain-language policies and self-management features, the straightforward home insurance coverage of Lemonade homeowners insurance could be a great fit.
Lemonade Home Insurance FAQ
About the Authors
Cate Deventer is a writer and licensed insurance agent. She has a Bachelor’s degree in theatre and is currently pursuing a degree in English with a concentration in professional and technical writing from Indiana University East. Her work has been featured on Reviews.com and Bankrate.com, and she’s passionate about helping people take charge of their finances. In her free time, she likes to read thrillers and sci-fi novels, garden, and toss tennis balls for her dog.
