While buying insurance is notoriously tedious and boring, a newer company called Lemonade promises to switch things up. With Lemonade renters and homeowner’s insurance, you can access a new kind of coverage that is less about profits and more about making insurance work well for everyone.
While Lemonade doesn’t necessarily think of itself as a peer-to-peer run insurance company, its operations emulate the peer-to-peer model in some ways.
For example, Lemonade says they treat your premiums as “your money” and not theirs, and that they charge a flat fee for handling your premiums and paying out claims.
They also offer a “Giveback” program that redistributes unpaid premiums to philanthropic causes their customers care about.
If you’re in the market for renters or homeowner’s insurance, this new insurance model offers an intriguing proposition you may want to consider.
Keep reading to learn more about how Lemonade Insurance works, how much it costs, and how it works for consumers in real life.
Is Lemonade Renters Insurance Legit?
Renters insurance is a must if you have belongings to protect, but you need to be sure to partner with the right company.
While it’s easy to be skeptical about an insurance company that claims to be fair and transparent about your premiums and its claims process, Lemonade renters and homeowner’s insurance is getting excellent reviews so far.
So, why haven’t you heard a ton about Lemonade yet? For starters, the company was founded in April of 2015, so it’s fairly new. Second, it’s extremely hard to get people to try new insurance companies that don’t have a household brand or a long history or claims.
For that reason, you may not know anyone else who uses Lemonade Insurance quite yet. Third, Lemonade isn’t available nationwide and is only up and running in 18 states plus Washington D.C. as of now.
How Does Lemonade Insurance Work?
Lemonade offers renters, homeowners, condo, and co-op insurance that can be tailored to each client’s unique needs. While they do promise to maintain affordable premiums, how much you’ll pay for your policy will depend on factors such as your credit history, claims history, and the condition of the property you’re insuring.
When it comes to homeowners insurance, Lemonade also factors in unique risks your property could face, such as exposure to wild fires, windstorms, and other severe weather.
When you apply for a new policy with Lemonade, you can read through coverage amounts and policy details to determine they’re a good fit. If you feel you need more than the standard coverage offered, you can also increase your coverage amounts to suit your needs.
Lemonade Insurance offers replacement cost for any items that are destroyed, damaged, or stolen. This means they will calculate the value of your item based on the least you could pay now if you were to buy it new.
If an item is no longer for sale, Lemonade will reimburse you based on the replacement cost of a similar item.
With Lemonade renter’s coverage, you can cover the personal belongings that matter the most to you — things like your laptop, your camera, and any pieces of art you own.
Lemonade also dedicates a page of their website to items their insurance doesn’t cover, so make sure to check it out.
Finally, Lemonade automatically covers everyone in your household who is related to you by blood, marriage, or adoption. If you need to file a claim, Lemonade lets you do so online or with their mobile app.
If your claim is approved, they promise to deposit the payment you’re due in your bank account minus your deductible.
While Lemonade says they would like if it claims were paid instantly, they know that many claims need to be investigated at a deeper level. For that reason, some claims take more time to check out and explore.
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How Much Does Lemonade Cost?
Lemonade renters or homeowner’s insurance premiums can vary widely depending on where you live, your credit history, your property values, and what kind of insurance you’re buying.
However, Lemonade keeps premiums low by taking only a flat 20% off the top to cover salaries, marketing, operating costs, and other expenses.
The other 80% of premiums paid in go to paying consumer claims and to reinsurance — a type of secondary insurance that would back up Lemonade financially if an exorbitant number of claims came in at once.
On top of that, Lemonade pledges to donate any money left over to their “Giveback” program — a voluntary donation program that sends excess funds to causes Lemonade customers choose.
Believe it or not, Lemonade actually lets you choose the cause you care about for your part of their donation.
If a charity you love isn’t part of their program, you can also email Lemonade and ask them to consider adding it to their list. The Giveback program also lets you change your cause once per year before June.
What Does Lemonade Insurance Cover?
Generally speaking, a Lemonade policy covers perils and living expenses. Basic policies they offer include coverage for damage to your possessions, theft, medical payments if someone that visits or lives in your home is injured, and personal liability insurance.
The “living expenses” part kicks in if your dwelling becomes uninhabitable for a while (or permanently) and you need a hotel or another place to live.
While Lemonade policies cover most of the same perils as traditional homeowner’s or renter’s insurance, it makes sense to read through your policy details before you commit to signing up. That way, you know what is and isn’t covered in detail.
Also note that you can add on more coverage for certain items or instances, such as pricey jewelry you own, earthquakes, fine art, cameras, bicycles, and more.
The Bottom Line
While Lemonade is a newer company on the renter’s insurance scene, they have excellent reviews and a solid business plan that seems entirely legit so far.
Since Lemonade offers a transparent claims process and charges a flat 20% fee for administering your policy and claims, it’s also possible Lemonade might offer lower premiums than you’re paying now.
With that in mind, you might as well get a quote from Lemonade to see how their premiums and coverage options stack up.
But, as we mentioned already, you might have to wait a while depending on where you live. Currently, this company operates in 18 states and Washington D.C. However, they plan to expand nationwide over time.
If you live in a state where Lemonade isn’t offered, you can stay tuned to find out when you can apply for Lemonade Insurance by signing up for their mailing list.
If you need insurance for a home you own or an apartment you’re renting, it doesn’t hurt to get quotes from a few different insurance firms so you’re able to compare them based on pricing and coverage.
Lemonade offers “instant everything, killer prices, and a big heart,” so what have you got to lose?
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